EXHIBIT 10.63
LEASE AGREEMENT
▇▇▇▇▇▇ HILLS IV
AND
SYMBION, INC.
- TABLE OF CONTENTS -
Page No.
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ARTICLE 1 - LEASE OF PREMISES................................................... 1
ARTICLE 2 - TERM AND POSSESSION................................................. 3
ARTICLE 3 - RENT................................................................ 4
ARTICLE 4 - SECURITY DEPOSIT.................................................... 6
ARTICLE 5 - OCCUPANCY AND USE................................................... 7
ARTICLE 6 - UTILITIES AND OTHER BUILDING SERVICES............................... 8
ARTICLE 7 - REPAIRS, MAINTENANCE, ALTERATIONS, and IMPROVEMENTS AND FIXTURES.... 10
ARTICLE 8 - FIRE OR OTHER CASUALTY; CASUALTY INSURANCE.......................... 11
ARTICLE 9 - GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE............. 12
ARTICLE 10 - EMINENT DOMAIN..................................................... 13
ARTICLE 11 - LIENS.............................................................. 13
ARTICLE 12 - RENTAL, PERSONAL PROPERTY AND OTHER TAXES.......................... 14
ARTICLE 13 - ASSIGNMENT AND SUBLETTING.......................................... 14
ARTICLE 14 - TRANSFERS BY LANDLORD.............................................. 15
ARTICLE 15 - DEFAULTS AND-REMEDIES.............................................. 15
ARTICLE 16 - LANDLORD'S RIGHT TO RELOCATE TENANT................................ 17
ARTICLE 17 - NOTICE AND PLACE OF PAYMENT........................................ 18
ARTICLE 18 - ENVIRONMENTAL REPRESENTATIONS, COVENANTS AND INDEMNITIES........... 18
ARTICLE 19 - MISCELLANEOUS GENERAL PROVISIONS................................... 19
SCHEDULE OF EXHIBITS............................................................ 23
EXHIBIT A-1 DESCRIPTION OF LAND............................................. 24
EXHIBIT A-2 DESCRIPTION OF LEASED PREMISES.................................. 25
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Page No.
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EXHIBIT B LEASEHOLD IMPROVEMENTS WITH RESPECT TO LEASED PREMISES.......... 27
EXHIBIT C RULES AND REGULATIONS........................................... 28
EXHIBIT D ESTOPPEL CERTIFICATE............................................ 31
EXHIBIT E COMMENCEMENT DATE AGREEMENT..................................... 32
EXHIBIT F WORK LETTER AGREEMENT........................................... 34
EXHIBIT G SPECIAL STIPULATIONS............................................ 40
EXHIBIT H JANITORIAL SCHEDULE - TENANT SPACE (LEASED PREMISES)............ 41
EXHIBIT I BUILDING SYSTEMS AND TECHNOLOGY................................. 44
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LEASE AGREEMENT
▇▇▇▇▇▇ HILLS IV
AND
SYMBION, INC.
THIS LEASE ("Lease"), made this 26th day of June, 2001, by and between
▇▇▇▇▇▇ HILLS IV PARTNERS, a Tennessee General Partnership ("Landlord") and
SYMBION, INC., a Tennessee corporation ("Tenant"),
W I T N E S S E T H:
ARTICLE 1 - LEASE OF PREMISES
Section 1.01. Lease of Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, subject to all of the terms and conditions
hereinafter set forth, office space in the office building described below that
is commonly known as ▇▇▇▇▇▇ Hills IV, Nashville, Davidson County, Tennessee (the
"Building") , and which is or shall be situated on the tract of land described
in Exhibit A-1 attached hereto (the "Land"), for the term hereinafter specified.
The space in the Building hereby leased to Tenant is set forth in Item B of the
Basic Lease Provisions and is outlined on Exhibit A-2 attached hereto (the
"Leased Premises"). Tenant also shall have the non-exclusive right in common
with the other tenants of the Building to use the Common Areas (as defined in
Section 19.03 hereof) subject to the terms and conditions hereinafter set forth.
The Building shall conform in all material respects to the specifications set
forth on Exhibit I attached hereto.
Section 1.02. Basic Lease Provisions.
A. Building Name: ▇▇▇▇▇▇ Hills IV
Address: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
B. Rentable Area of Leased Premises: Approximately 45,000 rentable square
feet (the top two full floors of the building);
C. Building Expense Percentage: Approximately 33.33% (45,000/135,000 rentable
square feet, actual percentage subject to verification of rentable area
within the Leased Premises and the Building following completion of
construction);
D. Minimum Annual Year l: $24.00/RSF $1,080,000 Annually $90,000 Monthly.
Rent: Year 2: $24.00/RSF $1,080,000 Annually $90,000 Monthly.
Year 3: $24.00/RSF $1,080,000 Annually $90,000 Monthly.
Year 4: $26.00/RSF $1,170,000 Annually $97,500 Monthly.
Year 5: $26.00/RSF $1,170,000 Annually $97,500 Monthly.
Year 6: $27.00/RSF $1,215,000 Annually $101,250 Monthly.
Year 7: $27.00/RSF $1,215,000 Annually $101,250 Monthly.
Year 8: $28.00/RSF $1,260,000 Annually $105,000 Monthly.
Year 9: $28.00/RSF $1,260,000 Annually $105,000 Monthly.
Year 10: $28.00/RSF $1,260,000 Annually $105,000 Monthly.
The dollar amounts of the annual and monthly rental payments set forth
above are subject to adjustment based upon final determination of the
Rentable Area of the Leased Premises, and any changes therein shall
be set forth in the Commencement Date Agreement attached hereto as
Exhibit E.
E. Monthly Rental Installments: According to the above schedule;
F. Term:Ten (10) years and zero (0) months (plus the number of days in the
month the Commencement Date occurs if less than a full calendar month);
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G. Target Commencement Date: November 1, 2002;
H. Security Deposits: An amount equal to one month's rent, $90,000, is
payable as a standard security deposit, and is due upon execution of
this Lease. An additional sum equal to one month's rent, $90,000, shall
be payable on the date of the commencement of Tenant Improvements for
the Leased Premises, such additional sum to be applied to the first
month's rent due November 1, 2002. See Article 4 for requirements for
refund.
I. Brokers: ▇▇▇▇ ▇. ▇▇▇, Broker, The ▇▇▇▇▇▇ Companies and ▇▇▇▇ ▇. ▇▇▇▇▇▇ &
Company;
J. Permitted Use: General office purposes;
K. Space Plan Approval Date: March 1, 2002 (See Exhibit B);
L. Options: Right of First Refusal (See Special Stipulations-Exhibit G) and
Five Year Extension Options (See Section 2.07);
M. Expiration Date: The last day of the month that is one hundred twenty
(120) months after the month in which the Commencement Date occurs (plus
number of days, if any, in a partial calendar month), or such earlier date
of any termination of this Lease;
N. Address for payments and notices:
Landlord: ▇▇▇▇▇▇ Hills IV Partners
▇/▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tenant*: Symbion, Inc.
▇▇▇▇▇▇ Hills IV Office Building
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
* Prior to the Lease Commencement Date, all notices to the
Tenant shall be sent to the following address:
Symbion, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
O. Delinquency Interest Rate: An annual percentage rate of interest equal to
three percentage points (3%) in excess of the "Prime Rate" from time to
time published in the Money Rates section of The Wall Street Journal,
which rate as published on the last publication day in any month shall be
deemed to be the appropriate reference rate for the entire next succeeding
calendar month; provided, however, that in no event shall the Delinquency
Interest Rate exceed the maximum contract rate of interest from time to
time allowed to be charged under applicable law. Should The Wall Street
Journal cease the publication of its Prime Rate, the Lessor shall have the
right to designate a comparable reference rate.
P. Lease Month: The calendar month or partial calendar month in which the
Commencement Date occurs, and each subsequent calendar month during the
Tenn.
Q. Lease Year: The period ending on the last day of the twelfth (12th) month
after the month in which the Commencement Date occurs, and the successive
annual period(s), if any, ending on each subsequent anniversary of said
date.
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ARTICLE 2 -- TERM AND POSSESSION
Section 2.01. Term. The term of this Lease shall be the period of time specified
in Item F of the Basic Lease Provisions and shall commence on: (i) the date
thirty (30) days after the Tenant's Work Completion Date, as defined in Section
2.2(a) of the Work Letter Agreement, Exhibit F ; or (ii) such earlier date as
Tenant takes possession or commences use of the Leased Premises and is obligated
hereunder to commence payment of Minimum Annual Rent. The date of commencement
as defined above, hereinafter called the "Commencement Date," and the
"Expiration Date" shall be confirmed by Tenant as provided in Section 2.03.
Section 2.02. Construction of Tenant Finish Improvements and Possession.
Landlord agrees to perform and complete the work on the tenant finish
improvements in the Leased Premises as set out in Exhibit B, subject to events
and delays due to causes beyond its reasonable control, and shall give written
notice of the day on which its work shall be completed. From and after receipt
of said notice or earlier with the consent of Landlord, Tenant shall have the
right and privilege of going onto the Leased Premises to complete interior
decoration work and to prepare the Leased Premises for its occupancy; provided,
however, that its schedule in so doing shall be communicated to Landlord and the
approval of Landlord secured so as not to interfere with other work of Landlord
being carried on at the time; and provided further that Landlord shall have no
responsibility or liability whatsoever for any loss or damage to any of Tenant's
leasehold improvements, fixtures, equipment or any other materials installed or
left in the Leased Premises prior to the Commencement Date.
Section 2.03. Tenant's Acceptance of the Leased Premises. Within thirty (30)
days following delivery of possession of the Leased Premises to Tenant as herein
provided, Tenant shall execute a Commencement Date Agreement in the form
attached hereto as Exhibit E acknowledging (i) the Commencement Date and the
Expiration Date of this Lease, and (ii) that Tenant has accepted the Leased
Premises for occupancy and that the condition of the Leased Premises, including
the tenant finish improvements constructed thereon by Landlord and the Building,
was at the time satisfactory and in conformity with the provisions of this Lease
in all respects, provided that any defects, including so-called "punchlist
items", as to which Tenant shall have given written notice to Landlord within
thirty (30) days after such delivery, shall have been corrected. If such defects
and punchlist items have not then been corrected, Landlord shall promptly
thereafter correct all such defects and punchlist items, and promptly upon
correction of same, Tenant shall execute and deliver such Commencement Date
Agreement. Such Commencement Date Agreement shall become a part of this Lease.
Section 2.04. Surrender of the Premises. Upon the expiration or earlier
termination of this Lease, or upon the exercise by Landlord of its right to
re-enter the Leased Premises without terminating this Lease, Tenant shall
promptly surrender the Leased Premises to Landlord, together with all
alterations, improvements and other property as provided elsewhere herein, in
good order, condition and repair, ordinary wear and tear excepted, failing which
Landlord may restore the Leased Premises to such condition at Tenant's expense.
Upon such expiration or termination, Tenant shall have the right to remove its
personal property (as described in Article 7). Tenant shall promptly repair any
damage caused by any such removal, and shall restore the Leased Premises to the
condition existing prior to the installation of the items so removed, ordinary
wear and tear excepted. This provision shall survive the expiration or earlier
termination of this Lease.
Section 2.05. Holding Over. If Tenant holds over after the expiration or earlier
termination of this Lease with the consent of Landlord, Tenant shall become a
tenant from month to month at one hundred twenty-five percent (125%) of Tenant's
then current rental rate including any additional rent for the Leased Premises
in effect upon the date of such expiration or earlier termination (subject to
adjustment as provided in Article 3 hereof and prorated on a daily basis), and
otherwise upon the terms, covenants and conditions herein specified, so far as
applicable. Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute consent to a holdover hereunder or result in a
renewal. Notwithstanding the foregoing provision, no holding over by Tenant
shall operate to extend this Lease, and Tenant shall vacate and surrender the
Leased Premises to Landlord upon Tenant's being given thirty (30) days prior
written notice from Landlord to vacate. The foregoing provisions of this Section
2.05 are in addition to and do not affect Landlord's right of re-entry or any
other rights of Landlord hereunder or as otherwise provided by law.
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Section 2.06. Quiet Enjoyment. So long as Tenant is not in default hereunder,
Landlord covenants and agrees that Tenant may peaceably hold and quietly enjoy
the Leased Premises subject to and upon the terms and conditions of this Lease.
Section 2.07. Extension Option. Tenant shall have two options to extend the Term
of the Lease for successive periods of sixty (60) months each; provided Tenant
is not in default hereunder at the time of the exercise of such option. Notice
of the exercise of Tenant's option to extend shall be given to Landlord not less
than nine (9) months prior to the expiration of the then effective Term hereof.
Unless otherwise negotiated between Tenant and Landlord, Minimum Annual Rent and
Monthly Rental Installments during any extension of the Term will be at the
prevailing market rate for first-class office space in the Green Hills/▇▇▇▇▇▇
Hills market at the time of the exercise of the extension option, but in no
event less than 95% of the rate in effect for the Leased Premises during the
final year of the initial term of this Lease or the final year of the first
option period, as the case may be. Adjustments outlined in Sections 3.02 and
3.03 of this Lease, and all other terms, conditions and provisions of this Lease
shall continue in full force and effect and be applicable during any extension.
Section 2.08. Space Reduction Option. Landlord hereby grants Tenant the option
to reduce the space rented under this Lease by not more than 10,000 Rentable
Square Feet, provided that Tenant provides Landlord written notice of its
exercise of such option (and the number of Rentable Square Feet by which it
wishes to reduce the Lease Premises) by no later than March 1, 2002. Absent
Landlord's receipt of such notice by March 1, 2002, the option hereby granted
shall lapse and be of no further force or effect. If, however, Tenant provides
Landlord with timely notice of the exercise of such option, the parties agree to
enter into an amendment to this Lease appropriately adjusting the Minimum Annual
Rent and other rents due hereunder, the amount of the Allowance for Tenant
Improvements, the commissions otherwise payable hereunder, and any other terms
impacted by Tenant's exercise of such option.
ARTICLE 3 -- RENT
Section 3.01. Base Rent. Tenant shall pay to Landlord as Minimum Annual Rent for
the Leased Premises the sums specified in Item D of the Basic Lease Provisions,
payable in equal consecutive Monthly Rental Installments as specified in Item E
of the Basic Lease Provisions, in advance, without notice, and without deduction
or offset except as expressly provided for herein, on or before the first day of
each and every calendar month during the term of this Lease; provided, however,
that if the Commencement Date shall be a day other than the first day of a
calendar month or the Expiration Date shall be a day other than the last day of
a calendar month, the Monthly Rental Installment for such first or last
fractional month shall be prorated; and provided, further, that in the event the
Lease Premises are ready for occupancy by Tenant prior to November l, 2002, and
Tenant in fact occupies the Leased Premises before such date, Tenant shall not
be required to commence payment of Minimum Annual Rent (and thus the
Commencement Date shall not be deemed to have occurred) until November l, 2002,
except in the event Tenant has been relieved from its obligation to pay rent
under its existing lease for office space on ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ prior to such date,
in which case the Commencement Date will be deemed to have occurred on the first
day after the last day with respect to which Tenant was required to pay rent for
such ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ office space.
Section 3.02. Annual Rental Adjustment.
A. Definitions. For purposes of this Section 3.02, the following definitions
shall apply:
1. "Annual Rental Adjustment" -- shall mean the amount of Tenant's
Proportionate Share of Operating Expenses for a particular calendar
year.
2. "Operating Expenses" -- shall mean the amount of all of Landlord's
direct costs and expenses paid or incurred in operating and
maintaining the Building (including the Common Areas (as defined in
Section 19.03 hereof) and the land described in Exhibit A-1) for a
particular calendar year as determined by Landlord in accordance with
generally accepted accounting principles, consistently applied,
including all additional direct costs and expenses of operation and
maintenance of the Building that Landlord reasonably determines that
it would have paid or incurred during such year if the Building had
been fully occupied, including by way of illustration and not
limitation: all general real estate taxes and all special assessments
levied against the Building (hereinafter called
4
"real estate taxes"), other than penalties for late payment; costs and
expenses of contesting the validity or amount of real estate taxes;
insurance premiums, water, sewer, electrical and other utility charges
other than any separately billed electrical and other charges paid by
Tenant as provided in this Lease; service and other charges incurred
in the operation and maintenance of the elevators and the heating,
ventilation and air-conditioning system; cleaning and other janitorial
services; rubbish removal; snow removal; tools and supplies; repair
costs; landscape maintenance costs; security services; license, permit
and inspection fees; management fees (not exceeding 4% of annual gross
rental income for the Building); wages and related employee benefits
payable for the maintenance and operation of the Building;
amortization of capital improvements made more than five (5) years
following the Commencement Date of this Lease that produce a net
reduction in operating costs, together with an assumed interest factor
equal to the prime rate of SouthTrust Bank or its successor, plus two
percent (2%) per annum, on the unamortized balance thereof; and in
general all other costs and expenses that would, under generally
accepted accounting principles, be regarded as operating and
maintenance costs and expenses. There shall also be included in
Operating Expenses the cost (or portion thereof reasonably allocable
to the Building, amortized over such period as Landlord shall
reasonably determine, together with an assumed interest factor equal
to the prime rate of SouthTrust Bank or its successor, plus two
percent (2%) per annum, on the unamortized balance) of any capital
improvements made to the Building by Landlord after the date of this
Lease that are required under any governmental law or regulation that
was not applicable to the Building at the time it was constructed.
Notwithstanding the foregoing, Operating Expenses shall not include
(i) the cost of alterations to space in the Building leased or to be
leased to others; (ii) depreciation, interest and principal payments
of mortgages and other debt costs, if any; (iii) federal, state and
city income, excess profit, gift, estate, succession, inheritance,
franchise and transfer taxes, and any other taxes relating to the
operation of Landlord's business but not the Building; (iv) expenses
for capital improvements made to the Building or Common Areas except
any capital improvements which results in savings of labor or other
costs to the extent of the lesser of the cost of such capital
improvements amortized over its useful life or the annual cost savings
resulting from such capital improvement; (v) those expenses incurred
in leasing space in the Building; and (vi) any cost or expenditure or
any portion thereof for which Landlord has been reimbursed, whether by
insurance proceeds or otherwise, except reimbursements or other
payments from other tenants of the Building in respect to costs and
expenses which are Operating Expenses.
3. "Building Expense Percentage" -- shall mean the percentage specified
in Item C of the Basic Lease Provisions. This percentage was
determined by dividing the Rentable Area of Leased Premises as
specified in Item B of the Basic Lease Provisions by the total
rentable area in the Building.
Notwithstanding the foregoing, in the event that any Building tenant is solely
and individually responsible for payment of one or more components of Operating
Expenses as they relate solely to such tenant's leased premises (e.g., such
tenant's electrical service is separately metered and billed to such tenant),
the Building Expense Percentage of each other Building tenant (including Tenant)
with respect to such component(s) of Operating Expenses as they relate to other
leased premises in the Building shall be increased so as to be a fraction, the
numerator of which is such other tenant's rentable area of leased premises, and
the denominator of which is the aggregate rentable area of leased premises of
all tenants not solely and individually responsible for payment of such
component(s) as they relate to their own leased premises.
4. "Landlord's Share of Operating Expenses" -- shall be an amount equal
to the greater of (i) $7.25 per square foot of the Rentable Area of
the Leased Premises, or (ii) an amount equal to the Base Year Expense
Stop times the square feet within the Rentable Area of Leased Premises
as specified in Item B of the Basic Lease Provisions. The Base Year
Expense Stop shall be an amount equal to the Operating Expenses (as
measured per rentable square foot) actually incurred during the
calendar year, 2003, grossed up to an annualized ninety-five percent
(95%) or greater occupancy and for fully-assessed annual taxes.
5. "Tenant's Proportionate Share of Operating Expenses" shall be an
amount equal to the remainder of (i) the product of Tenant's Building
Expense Percentage times the Building Operating
5
Expenses, less (ii) Landlord's Share of Operating Expenses; provided,
however, Tenant's Proportionate Share of Operating Expenses shall not
increase at a rate in excess of five percent (5%) per annum on a
cumulative basis, provided further that increases in cost of Building
electricity, taxes and insurance shall not he included in this
limitation.
B. Payment Obligation. In addition to the Minimum Annual Rent specified
in this Lease, Tenant shall pay to Landlord as additional rent for the Leased
Premises, in each calendar year or partial calendar year during the term of this
Lease, an amount equal to the Annual Rental Adjustment for such calendar year or
partial calendar year.
1. Tenant's Annual Proportionate Share of Building Operating Expenses
-- The Annual Rental Adjustment shall be estimated annually by
Landlord. Tenant shall pay to Landlord each month, at the same
time the Monthly Rental Installment is due, an amount equal to
one-twelfth (1/12) of the estimated Annual Rental Adjustment.
2. Increases in Estimated Annual Rental Adjustment -- If real estate
taxes, the cost of utility or janitorial services or any other
Operating Expenses increase during a calendar year, Landlord may
increase the estimated Annual Rental Adjustment during such year
by giving Tenant written notice to that effect, and thereafter
Tenant shall pay to Landlord, in each of the remaining months of
such year, an amount equal to the amount of such increase in the
estimated Annual Rental Adjustment divided by the number of months
remaining in such year.
3. Adjustment to Actual Annual Rental Adjustment -- Following the end
of each calendar year (or partial calendar year, as appropriate)
during the term of this Lease, Landlord shall prepare and deliver
to Tenant a statement showing Tenant's actual Annual Rental
Adjustment during such period. Within thirty (30) days after
receipt of the aforementioned statement, Tenant shall pay to
Landlord, or Landlord shall credit against the next rent payment
or payments due from Tenant; as the case may be, the difference
between the actual amount of Tenant's Annual Rental Adjustment for
such period and the estimated amount paid by Tenant for such
period. If this Lease shall commence, expire or be terminated on
any date other than the last day of a calendar year, then the
actual amount of Tenant's Proportionate Share of Operating
Expenses for such partial calendar year shall be prorated on the
basis of the number of days during the year this Lease was in
effect in relation to the total number of days in such year.
4. Tenant Verification -- Only upon twenty (20) days written notice
to Landlord, Tenant or its accountants shall have the right to
inspect, at reasonable times and in a reasonable manner, during
the ninety (90) day period following the delivery of Landlord's
statement of the actual amount of Tenant's Annual Rental
Adjustment, such of Landlord's books of account and records as
reasonably pertain to and contain information concerning such
costs and expenses in order to verify the amounts thereof.
Section 3.03. Contribution for Certain Tenant Finish Improvements. Tenant shall
pay to Landlord all costs of Tenant's Work for tenant finish improvements in
excess of the Allowance, as provided for in Exhibit B and Exhibit F.
ARTICLE 4 -- SECURITY DEPOSIT
As security for the performance and observance by Tenant of all of its
obligations under this Lease, Tenant has deposited with Landlord the sum
specified in Item H of the Basic Lease Provisions, which sum shall be held by
Landlord as a security deposit during the terms of this Lease. If Tenant
performs and observes all of the terms, conditions and covenants of this Lease
that are required to be performed and observed by it, Landlord shall return the
security deposit, or balance thereof then held by Landlord, to Tenant within
sixty (60) days after the expiration of this Lease or after Tenant surrenders
possession of the Leased Premises, whichever is later. In the event of a default
by Tenant in the payment of rent or the performance or observance of any of the
other terms, conditions, or covenants of this Lease, then Landlord may, at its
option and without notice, apply all or any part of the security deposit in
payment of such rent or to cure any other such default; and if Landlord does so,
Tenant shall, upon
6
request, deposit with Landlord the amount so applied so that Landlord will have
on hand at all times during the term of this Lease the full amount of the
security deposit. Landlord shall not be required to hold the security deposit as
a separate account, but may commingle it with Landlord's other funds. Unless and
until any security deposit is applied to payment of rent or cure of any other
default, Landlord shall pay Tenant interest on the security deposits of Tenant
held by Landlord at the rate of 5% per annum, which interest shall be paid as a
credit, first against the Annual Rental Adjustment, and second against the
Minimum Annual Rent from time to time due and payable under this Lease. After
the first five (5) years of the Lease Term have expired and no default or event
of default then exists hereunder, Landlord shall at Tenant's request refund
Tenant's security deposit then remaining unapplied to Tenant's obligations
hereunder, provided that at such time as the request for such refund is made,
Tenant is determined to be a credit-worthy tenant, such determination to be made
by Landlord in the exercise of its discretion.
In the event of a sale of the Building, Landlord shall have the right to
transfer the security deposit to its purchaser, and Landlord shall thereupon be
released from all responsibility for the return of such deposit; and Tenant
agrees to look solely to the new purchaser for the return of such deposit. In
the event of an assignment of this Lease by Tenant, the security deposit shall
be deemed to be held by Landlord as a deposit made by the assignee, and Landlord
shall have no further responsibility for the `return of such deposit to the
assignor.
ARTICLE 5 -- OCCUPANCY AND USE
Section 5.01. Occupancy. Tenant shall use and occupy the Leased Premises for the
purposes set forth in Item J of the Basic Lease Provisions and shall not use the
Leased Premises for any other purpose except with the prior written consent of
Landlord.
Section 5.02. Covenants of Tenant Regarding Use. In connection with its use of
the Leased Premises, Tenant agrees to do the following:
A. Tenant shall use the Leased Premises and conduct its business thereon in a
safe, careful, reputable and lawful manner.
B. Tenant shall not use the Leased Premises for any unlawful purpose or act;
shall not commit or permit any waste or damage to the Leased Premises;
shall comply with and obey all laws, regulations and orders of any
governmental authority or agency, all reasonable directions of the
Landlord, including the Building Rules and Regulations attached hereto as
Exhibit C, as the same may be modified from time to time by Landlord on
reasonable notice to Tenant; shall not do or permit anything to be done in
or about the Leased Premises that will in any way obstruct or interfere
with the rights of other tenants or occupants of the Building or injure or
annoy them. Landlord shall not be responsible to Tenant for the
nonperformance by any other tenant or occupant of the Building of any of
the Building Rules and Regulations, but agrees to take reasonable measures
to assure such other tenant's compliance.
C. Tenant shall not overload the floors of the Leased Premises beyond their
designed weight-bearing capacity, which Landlord has determined to be
seventy (70) pounds per square foot live load, including an allowance for
partition load. Landlord reserves the right to direct the positioning of
all heavy equipment, furniture and fixtures that Tenant desires to place in
the Leased Premises so as to distribute properly the weight thereof, and to
require the removal of any equipment or furniture that exceeds the weight
limit specified herein.
D. Tenant shall not use the Leased Premises, or allow the Leased Premises to
be used, for any purpose or in any manner that would, in Landlord's
opinion, invalidate any, policy of insurance now or hereafter carried on
the Building or increase the rate of premiums payable on any such insurance
policy. Should Tenant fail to comply with this covenant, Landlord may, at
its option, require Tenant to stop engaging in such activity or to
reimburse Landlord as additional rent for any increase in premiums charged
during the term of this Lease on the insurance carried by Landlord on the
Leased Premises and attributable to the use being made of the Leased
Premises by Tenant.
7
E. Tenant shall not inscribe, paint, affix or display any signs,
advertisements or notices on the Building, except for such tenant
identification information as Landlord permits to be included or shown on
the directory board in the main lobby and on or adjacent to the access door
or doors to the Leased Premises.
Section 5.03. Landlord's Rights Regarding Use. In addition to the rights
specified elsewhere in this Lease, Landlord shall have the following rights
regarding the use of the Leased Premises or the Common Areas by Tenant, its
employees, agents, customers and invitees, each of which may be exercised
without notice or liability to Tenant:
A. Landlord may install such signs, advertisements or notices or tenant
identification information on the directory board or tenant access doors,
as it shall deem necessary or proper.
B. Landlord shall approve or disapprove, prior to installation, all types of
drapes; shades and other window coverings used in the Leased Premises, and
may control all internal lighting that may be visible from outside the
Leased Premises.
C. Landlord shall approve or disapprove all sign painting and lettering used
on the Leased Premises and the Building, including the suppliers thereof.
D. Landlord may grant to any person the exclusive right to conduct any
business or render any service in the Building, provided that such
exclusive right shall not operate to limit Tenant from using the Leased
Premises for the use permitted in Item J of the Basic Lease Provisions.
E. Landlord may control the Common Areas in such manner as it deems necessary
or proper, including by way of illustration and not limitation: requiring
all persons entering or leaving the Building to identify themselves and
their business in the Building; excluding or expelling any peddler,
solicitor or loud or unruly person from the Building; and closing or
limiting access to the Building or any part thereof, including entrances,
corridors, doors and elevators, during times of emergency repairs or after
regular business hours.
Section 5.04. Access to and Inspection of the Leased Premises. Upon not less
than 48 hours prior written notice, Landlord, its employees and agents and any
mortgagee of the Building shall have the right to enter any part of the Leased
Premises during normal business hours for the purposes of examining or
inspecting the same, showing the same to prospective purchasers, mortgagees or
tenants and making such repairs, alterations or improvements to the Leased
Premises or the Building as Landlord may deem necessary or desirable; provided,
however, in the event of an emergency, as determined in Landlord's reasonable
judgment, no prior notice shall be required and entry shall not be limited to
normal business hours. In addition, during the last ninety (90) days of the
Term, Landlord, its employees and agents shall have the right to enter any part
of the Leased Premises at reasonable times for the purposes of showing the same
to prospective tenants. If representatives of Tenant shall not be present to
open and permit such entry into the Leased Premises at any time when such entry
is necessary or permitted hereunder, Landlord and its employees and agents may
enter the Leased Premises by means of a master or passkey or otherwise. Landlord
shall incur no liability to Tenant for such entry, nor shall such entry
constitute an eviction of Tenant or a termination of this Lease, or entitle
Tenant to any abatement of rent therefor.
ARTICLE 6 -- UTILITIES AND OTHER BUILDING SERVICES
Section 6.01. Services to be Provided. Provided Tenant is not in material
default under this Lease beyond any applicable notice and cure period herein
provided, Landlord shall furnish to Tenant, except as noted below, the following
utilities and other building services to the extent reasonably necessary for
Tenant's comfortable use and occupancy of the Leased Premises for general office
use:
A. Heating, ventilation and air-conditioning between the hours of 8:00 a.m.
and 7:00 p.m. on Monday through Friday and 8:00 a.m. to 1:00 p.m. on
Saturday of each week except on legal holidays. If Tenant shall require air
conditioning (heating and cooling) during any season outside the hours and
days above specified, Landlord shall furnish the same for the area or areas
specified in a written request of Tenant delivered to the manager of the
Building, and for such service, Tenant shall pay Landlord, upon receipt of
a
8
▇▇▇▇ therefore, an amount equal to the rate Landlord, at that time, is
charging for service, such amount shall be equal to twenty-five ($25.00)
per hour for the first year of the Lease term, and shall not increase by
more than $5.00 per hour, cumulative, for each subsequent year of the term;
B. Electrical current not to exceed five ▇▇▇▇▇ (5) ▇▇▇▇▇ per square foot;
C. Water in the Common Areas for lavatory and drinking purposes;
D. Automatic elevator service;
E. Cleaning and janitorial service, including the supplying and installing of
paper towels, toilet tissue and soap in the Common Areas on Monday through
Friday of each week except legal holidays, in accordance with the standards
set forth on Exhibit H attached hereto; provided, however, Tenant shall be
responsible for carpet cleaning other than routine vacuuming;
F. Washing of windows at intervals reasonably established by Landlord;
G. Replacement of all lamps, bulbs, starters and ballasts in Building standard
lighting (Landlord's standard tenant finish improvements being described in
Exhibit B and Exhibit F) as required from time to time as a result of
normal usage;
H. Cleaning and maintenance of the Common Areas, including the removal of
rubbish and snow; and
I. Repair and maintenance to the extent specified elsewhere in this Lease.
J. Exterior lighting and pass-card access to the building after standard
building hours.
K. Patrol service to monitor the parking lot and Building entrances twice
nightly.
L. Twelve (12) reserved parking spaces and additional non-reserved parking
spaces in parking facilities adjacent to the Building, such that the total
number of parking spaces to be made available to Tenant shall be equal to
three (3) spaces for every 1000 rentable square feet of space within the
Leased Premises, i.e. a total of 135 parking spaces for Tenant if there are
45,000 rentable square feet within the Leased Premises.
M. Exterior signage adequate to allow the public to clearly identify the
Building.
Notwithstanding the foregoing, it is understood and agreed that at Landlord's
option, electrical service for the Leased Premises (including but not limited to
the electrical power used to operate the heating, ventilation and air
conditioning equipment serving the Leased Premises) may be separately metered
for the Leased Premises, in which event (i) Tenant shall be responsible for the
timely payment of all charges for electric power supplied through such meter,
(ii) neither Landlord nor any other tenant in the Building shall have any
obligation to pay for all or any part of the charges for electric power used in
the Leased Premises or the operations thereof, and (iii) the only electric
service charges that will be included by Landlord in the Operating Expenses for
purposes of Tenant's Annual Rental Adjustment will be those relating to the
Common Areas (including but not limited to the parking garage and the foyers,
hallways and corridors of the Building).
Section 6.02. Additional Services. If Tenant requests any other utilities or
building services in addition to those identified above or any of the above
utility or building services in frequency, scope, quality or quantity
substantially greater than those that Landlord determines are normally required
by other tenants in the Building for general office use, then Landlord shall use
reasonable efforts to attempt to furnish Tenant with such additional utilities
or building services. In the event Landlord is able to and does furnish such
additional utilities or building services, the costs thereof shall be determined
solely by Landlord, exercising its reasonable business judgment, and shall be
borne by Tenant, who shall reimburse Landlord monthly for the same as additional
rent at the same time Monthly Rental Installments and other additional rent is
due. If any lights, machines or equipment (including but not limited to
computers) used by Tenant in the Leased Premises materially affect the
temperature otherwise maintained by the
9
Building's air-conditioning system or generate substantially more heat in the
Leased Premises than that which normally would be generated by the lights and
business machines typically used by other tenants in the Building or by tenants
in comparable office buildings, then Landlord shall have the right to install
any machinery or equipment that Landlord reasonably considers necessary in order
to restore the temperature balance between the Leased Premises and the rest of
the building, including equipment that modifies the building's air-conditioning
system. All costs expended by Landlord to install any such machinery and
equipment and any additional costs of operation and maintenance occasioned
thereby shall be borne by Tenant, who shall reimburse Landlord for the same as
provided in this Section 6.02.
Without Landlord's prior written consent, Tenant's use of electric current shall
not exceed the capacity of the feeders to the Building or the risers or wiring
installations, nor shall Tenant install or connect any computer, electronic data
processing or other electrical equipment that in the aggregate causes Tenant's
electrical usage to exceed four (4) ▇▇▇▇▇ per square foot. If Landlord
determines that Tenant's electrical usage exceeds the aforesaid limit or
otherwise exceeds the designed load capacity of the Building's electrical system
or is in any way incompatible therewith, then Landlord shall have the right, as
a condition to granting its consent, to make such modifications to the
electrical system or other parts of the building or Leased Premises, or to
require Tenant to make such modifications to the equipment to be installed or
connected, as Landlord considers to be reasonably necessary before such
equipment may be so installed or connected. The cost of any such modifications
shall be borne by Tenant, who shall reimburse Landlord for the same (or any
portion thereof paid by Landlord) as provided in this Section 6.02.
Section 6.03. Interruption of Services. Tenant understands, acknowledges and
agrees that any one or more of the utilities or other building services
identified in Section 6.01 may be interrupted by reason of accident, emergency
or other causes beyond Landlord's control, or maybe discontinued or diminished
temporarily by Landlord or other persons until certain repairs, alterations or
improvements can be made; that Landlord does not represent or warrant the
uninterrupted availability of such utilities or building services, and that any
such interruption shall not be deemed an eviction or disturbance of Tenant's
right to possession, occupancy and use of the Leased Premises or any part
thereof, or render Landlord liable to Tenant for damages by abatement of rent or
otherwise, or relieve Tenant from the obligation to perform its covenants under
this Lease; provided, however, that any such interruption that lasts for three
(3) or more consecutive business days and prevents Tenant from conducting
business in the ordinary course within the Leased Premises shall be deemed to
constitute a material disturbance of Tenant's right to use the Leased Premises,
entitling Tenant to an equitable abatement of rent until such essential
utilities or other building services are restored.
ARTICLE 7 -- REPAIRS, MAINTENANCE, ALTERATIONS, and IMPROVEMENTS AND FIXTURES
Section 7.01. Repair and Maintenance of Building. Subject to Section 7.02 and
except for any repairs made necessary by the negligence, misuse or default of
Tenant, its employees, agents, customers and invitees, Landlord shall make all
necessary repairs to the exterior walls, exterior doors, windows, corridors and
other Common Areas of the Building, and Landlord shall keep the Building in a
safe, clean and neat condition and use reasonable efforts to keep all equipment
used in common with other tenants, such as elevators, plumbing, heating, air
conditioning and similar equipment, in good condition and repair. Except as
provided in Section 6.03 and in Article 8 and Article 10 hereof, there shall be
no abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Leased
Premises or in or to any fixtures, appurtenances and equipment therein or
thereon.
Section 7.02. Repair and Maintenance of Leased Premises. Landlord shall keep and
maintain the Leased Premises in good order, condition and repair. Except for the
services specified in Section 6.01 (E), (F) and (G), and except for ordinary
wear and tear and damage that Tenant is not obligated to repair as provided
elsewhere in this Lease, the cost of all repairs and maintenance to the Leased
Premises shall be borne by Tenant, who shall be separately billed and shall
reimburse Landlord for the reasonable cost of same as additional rent.
Section 7.03. Alterations or Improvements. Tenant may not make, or permit to be
made, alterations to the Leased Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed. If
Landlord allows Tenant to make any such alterations, Tenant shall make the same
in accordance with all applicable laws and building codes, in a good and
workmanlike manner and in quality equal to or better than the
10
original construction of the Building and shall comply with such requirements as
Landlord considers necessary or desirable, including without limitation
requirements as to the manner in which and the times at which such work shall be
done and the contractor or subcontractors to be selected to perform such work.
In addition, Tenant shall provide Landlord with evidence of insurance coverage
for such alterations and detailed plans and specifications satisfactory to
Landlord prior to construction of such improvements. Upon completion of such
construction, Tenant shall provide Landlord with lien waivers from all persons
performing work or supplying materials for such alterations and such other
evidence as Landlord may require in order to assure itself that no person is in
a position to assert a claim or lien against the Leased Premises or the Building
in connection therewith. Tenant shall promptly pay all costs attributable to
such alterations. Tenant shall promptly repair any damage to the Leased Premises
or the Building caused by any such alterations. Any alterations to the Leased
Premises, except movable office furniture and equipment and trade fixtures,
shall become a part of the realty and the property of Landlord and shall not be
removed by Tenant.
Section 7.04. Trade Fixtures. Any trade fixtures installed on the Leased
Premises by Tenant at its own expense, such as movable partitions, counters,
shelving, showcases, mirrors and the like, may, and, at the request of Landlord
shall, be removed on the expiration or earlier termination of this Lease,
provided that Tenant is not then in default, that Tenant bears the cost of such
removal, and further that Tenant repairs at its own expense any and all damage
to the Leased Premises resulting from such removal. If Tenant fails to remove
any such trade fixtures from the Leased Premises on the expiration or earlier
termination of this Lease, all such trade fixtures shall become the property of
Landlord unless Landlord elects to require their removal, in which case Tenant
shall, at its expense, promptly remove the same and restore the Leased Premises
to their prior condition. This provision shall survive the expiration or earlier
termination of this Lease.
ARTICLE 8 -- FIRE OR OTHER CASUALTY; CASUALTY INSURANCE
Section 8.01. Substantial Destruction of the Building or the Leased Premises. If
either the Building or the Leased Premises should be substantially destroyed or
damaged (which as used herein means destruction or material damage to at least
one-half (1/2) of the Building or the Leased Premises) by fire or other
casualty, then Landlord may, at its option, terminate this Lease by giving
written notice of such termination to Tenant within thirty (30) days after the
date of such casualty. In such event, rent shall be apportioned to and shall
cease as of the date of such casualty. If Landlord does not exercise this
option, then the Leased Premises shall be reconstructed and restored, at
Landlord's expense, to substantially the same condition as prior to the
casualty; provided however, that with respect to the Leased Premises, Landlord's
obligation hereunder shall be limited to the reconstruction of such of the
tenant finish improvements as were originally required to be made by Landlord in
accordance with Exhibit B and Exhibit F, and further provided that, if Tenant
has made any additional improvements pursuant to Section 7.03, Tenant shall
reimburse Landlord for the cost of reconstructing the same. In the event of such
reconstruction, rent shall be abated from the date of the casualty until
substantial completion of the reconstruction repairs; and this Lease shall
continue in full force and effect for the balance of the term.
Section 8.02. Partial Destruction of the Leased Premises. If the Leased Premises
should be damaged by fire or other casualty, but not substantially destroyed or
damaged to the extent provided in Section 8.01, then such damaged part of the
Leased Premises shall be reconstructed and restored, at Landlord's expense, to
substantially the same condition as it was prior to the casualty; provided,
however, that Landlord's obligation hereunder shall be limited to the
reconstruction of such of the tenant finish improvements as were originally
required to be made by Landlord in accordance with Exhibit B and Exhibit F, and
further provided that if Tenant has made any additional improvements pursuant to
Section 7.03, Tenant shall reimburse Landlord for the cost of reconstructing the
same. In such event, if the damage is expected to prevent Tenant from carrying
on its normal business activity in the Leased Premises to a reasonable extent,
rent shall be abated in the proportion that the approximate area of the damaged
part bears to the total area in the Leased Premises from the date of the
casualty until substantial completion of the reconstruction repairs; and this
Lease shall continue in full force and effect for the balance of the term.
Landlord shall use reasonable diligence in completing such reconstruction
repairs, but in the event Landlord fails to complete the same within one hundred
eighty (180) days from the date of the casualty or such longer period as is
reasonably necessary for Landlord to complete the repair using reasonable
diligence, Tenant may, at its option, terminate this Lease by giving Landlord
written notice of such termination, whereupon this Lease shall terminate.
11
Section 8.03. Casualty Insurance. Landlord shall at all times during the term of
this Lease carry a policy of insurance that insures the replacement cost of the
Building, including the Leased Premises, against loss or damage by fire or other
casualty (namely, the perils against which insurance is afforded by a standard
"all-risk" casualty insurance policy); provided, however, that Landlord shall
not be responsible for, and shall not be obligated to insure against, any loss
of or damage to any personal property of Tenant or that Tenant may have in the
Building or the Leased Premises or any trade fixtures installed by or paid for
by Tenant on the Leased Premises or any additional improvements that Tenant may
construct on the Leased Premises, and Landlord shall not be liable for any loss
or damage to such property, regardless of cause, including the negligence of
Landlord and its employees, agents, customers and invitees. If the tenant finish
improvements installed by Landlord or Tenant pursuant to Exhibit B that are in
excess of the Building standard tenant finish improvements, or any alterations
or improvements made by Tenant pursuant to Section 7.03, result in an increase
in the premiums charged during the term of this Lease on the casualty insurance
carried by Landlord on the Building, then the cost of such increase in insurance
premiums shall be borne by Tenant, who shall reimburse Landlord for the same as
additional rent after being separately billed therefor.
Section 8.04. Waiver of Subrogation. Landlord and Tenant agree to have all
casualty insurance that may be carried by either of them endorsed with a clause
providing that any release from liability of or waiver of claim for recovery
from the other party entered into in writing by the insured thereunder prior to
any loss or damage shall not affect the validity of said policy or the right of
the insured to recover thereunder; and providing further that the insurer waives
all rights of subrogation that such insurer might have against the other party.
Without limiting any release or waiver of liability or recovery contained in any
other section of this Lease, but rather in confirmation and furtherance thereof,
Landlord waives all claims for recovery from Tenant, and Tenant waives all
claims for recovery from Landlord, the managing agent of the Building and their
respective agents, partners, servants and employees, for any loss or damage to
any of its property caused by a fire or other peril usually covered by a policy
of insurance of the type described in Section 8.03 or 9.02C, and each party
releases the other from all liability for damage from those causes, including
any subrogation claims of any insurer. This provision shall apply regardless of
the negligence of either party and shall not be limited by the amount of
insurance coverage:
Notwithstanding the foregoing or anything contained in this Lease to
the contrary, no such release or waiver of claims shall be operative, nor shall
the foregoing endorsements be required, in any case where the effect of such
release or waiver is to invalidate insurance coverage or invalidate the right of
the insured to recover thereunder or increase the cost thereof (provided that in
the case of increased cost the other party shall have the right, within ten (10)
days following written notice, to pay such increased cost, thereby keeping such
release or waiver in full force and effect).
ARTICLE 9 -- GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE
Section 9.01. Tenant's Responsibility. Tenant shall assume the risk of, be
responsible for, have the obligation to insure against and indemnify Landlord
and hold it harmless from any and all liability for any loss of or damage or
injury to any person (including death resulting therefrom) or property occurring
in, on or about the Leased Premises, regardless of cause, except for any loss or
damage from fire or casualty as provided in Section 8.03 and except for that
caused by the negligence of Landlord and its employees, agents, tenants,
customers and invitees; and, except for such loss or damage caused by Landlord's
negligence or that of its employees, agents, tenants, customers and invitees,
Tenant hereby releases Landlord from any and all liability for the same.
Tenant's obligation to indemnify Landlord hereunder shall include the duty to
defend against any claims asserted by reason of such loss, damage or injury and
to pay any adjustments, settlements, costs, fees and expenses, including
attorneys' fees, incurred in connection therewith. Notwithstanding anything
herein to the contrary, Tenant shall bear the risk of any loss or damage to its
property as provided in Section 8.03.
Section 9.02. Tenant's Insurance. Tenant, in order to enable it to meet its
obligation to insure against the liabilities specified in this Lease, shall at
all times during the term of this Lease carry, at its own expense, for the
protection of Tenant and Landlord, as their interests may appear, one or more
policies of general public liability and property damage insurance, issued by
one or more insurance companies acceptable to Landlord, with the following
minimum coverage's:
A. Worker's Compensation -- minimum statutory amount.
12
B. Comprehensive General Liability -- Not less than $1,000,000 Combined
Insurance, including Blanket, Single Limit for both bodily
Contractual Liability, Broad Form injury and property
Property Damage, Personal Injury, damage.
Completed Operations, Products
Liability, Fire Damage.
C. "All Risk" Casualty Coverage, Vandalism and Malicious Mischief and
Sprinkler Leakage insurance, for the full cost of replacement of Tenant's
property.
The insurance policy or policies for the insurance required in B and C above
shall name Landlord as an additional insured and shall provide that they may not
be canceled on less than thirty (30) days' prior written notice to Landlord.
Tenant shall furnish Landlord with Certificates of Insurance evidencing all
required coverage. Should Tenant fail to carry such insurance and furnish
Landlord with such Certificates of Insurance after a request to do so, Landlord
shall have the right to obtain such insurance and collect the cost thereof from
Tenant as additional rent.
Section 9.03. Landlord's Responsibility. Landlord shall assume the risk of, be
responsible for, have the obligation to insure against and indemnify Tenant and
hold it harmless from, any and all liability for any loss of or damage or injury
to person (including death resulting therefrom) or property (other than Tenant's
property as provided in Section 8.03) occurring in, on or about the Common
Areas, regardless of cause, except for that caused by the sole negligence of
Tenant and its employees, agents, subtenants, customers and invitees; and
Landlord hereby releases Tenant from any and all liability for the same.
Landlord's obligation to indemnify Tenant hereunder shall include the duty to
defend against any claims asserted by reason of such loss, damage or injury and
to pay any judgments; settlements, costs, fees and expenses, including
attorneys' fees, incurred in connection therewith.
ARTICLE 10 -- EMINENT DOMAIN
If the whole or any part of the Leased Premises shall be taken for public or
quasi-public use by a governmental or other authority having the power of
eminent domain or shall be conveyed to such authority in lieu of such taking,
and if such taking or conveyance shall cause the remaining part of the Leased
Premises to be untenantable and inadequate for use by Tenant for the purpose for
which they were leased, then Tenant may, at its option, terminate this Lease. If
a part of the Leased Premises shall be taken or conveyed but the remaining part
is tenantable and adequate for Tenant's use, then this Lease shall be terminated
as to the part taken or conveyed as of the date Tenant surrenders possession;
Landlord shall make such repairs, alterations and improvements as may be
necessary to render the part not taken or conveyed tenantable; and the rent
shall be reduced in proportion to the part of the Leased Premises so taken or
conveyed. All compensation awarded for such taking or conveyance shall be the
property of Landlord without any deduction therefrom for any present or future
estate of Tenant, and Tenant hereby assigns to Landlord all its right, title and
interest in and to any such award.
ARTICLE 11 -- LIENS
Notwithstanding any provision of this Lease relating to improvements, additions,
alterations, repairs and/or reconstruction of or to the Leased Premises,
Landlord and Tenant hereby agree and confirm that (i) Landlord has not consented
and will not consent to the furnishing of any labor or materials to the Leased
Premises that would or may result in any mechanics' or material man's liens
attaching to the Building or Landlord's interest in the Leased Premises, (ii)
Tenant is not the agent of Landlord for the purposes of any such improvements,
additions, alterations, repairs and/or reconstruction, and (iii) except as
expressly provided herein, Landlord has retained no control over the manner in
which any such improvements, additions, alterations, repairs and/or
reconstruction are or is accomplished, and has made no agreement to make or be
responsible for any payment to or for the benefit of any person furnishing labor
and/or materials in connection therewith. No such person furnishing labor and/or
materials to or for the account of Tenant shall be entitled to claim any lien
against the Building or the interest of Landlord in the Leased Premises and such
person(s) shall look solely to Tenant and the leasehold interest of Tenant under
this Lease for satisfaction of any such claims. If, because of any act or
omission of Tenant or any person claiming by, through or under Tenant, any
mechanic's, material-man's or other lien shall be filed and/or asserted against
the Leased Premises or the Building or against other property of Landlord
(whether or not such lien is valid or enforceable as such), Tenant shall, at its
own expense, cause the same to be discharged of record or bonded over within
thirty (30)
13
days after the date of filing thereof, and shall also indemnify
Landlord and hold it harmless from any and all claims, losses, damages,
judgments, settlements, costs and expenses, including attorneys' fees, resulting
therefrom or by reason thereof. Landlord may, but shall not be obligated to, pay
the claim upon which such lien is based so as to have such lien released of
record; and, if Landlord does so, then Tenant shall pay to Landlord, as
additional rent, upon demand, the amount of such claim, plus all other costs and
expenses incurred in connection therewith, plus interest thereon at the
Delinquency Interest Rate until paid. This section shall survive the expiration
or earlier termination of this Lease.
ARTICLE 12 -- RENTAL, PERSONAL PROPERTY AND OTHER TAXES
Tenant shall pay before delinquency any and all taxes, assessments, fees or
charges, including any sales, gross income, rental, business occupation or other
taxes, levied or imposed upon Tenant's business operations in the Leased
Premises and any personal property or similar taxes levied or imposed upon
Tenant's trade fixtures, leasehold improvements or personal property located
within the Leased Premises. In the event any such taxes, assessments, fees or
charges are charged to the account of, or are levied or imposed upon the
property of Landlord, Tenant shall reimburse Landlord for the same as additional
rent. If any tenant finish improvements, trade fixtures, alterations or
improvements or business machines and equipment located in, on or about the
Leased Premises, regardless of whether they are installed or paid for by
Landlord or Tenant and whether or not they are affixed to and become a part of
the realty and the property of Landlord, are assessed for real property tax
purposes at a valuation higher than that at which other such property in other
leased space in the Building is assessed, then Tenant shall reimburse Landlord
as additional rent for the amount of real property taxes shown on the
appropriate governmental official's records as having been levied upon the
Building or other property of Landlord by reason of such excess assessed
valuation.
ARTICLE 13 -- ASSIGNMENT AND SUBLETTING
Tenant may not assign this Lease or sublet the Leased Premises or any part
thereof without the prior written consent of Landlord, which consent shall not
be unreasonably withheld; and any attempted assignment or subletting without
such consent shall be invalid. At least thirty (30) days prior to the proposed
effective date of such assignment or sublease, Tenant shall provide Landlord a
signed original of the document. Tenant shall also provide, at Landlord's
request, any information on the proposed assignee or subtenant that Landlord may
require to make a determination of the quality of such proposed assignee or
subtenant. In the event of a permitted assignment or subletting, Tenant shall
nevertheless at all times remain fully responsible and liable for the payment of
rent and the performance and observance of all of Tenant's other obligations
under the terms, conditions and covenants of this Lease except as may be
otherwise provided for herein. No assignment or subletting of the Leased
Premises or any part thereof shall be binding upon Landlord unless such assignee
or subtenant shall deliver to Landlord an instrument (in record able form, if
requested) containing an agreement of assumption of all of Tenant's obligations
under this Lease. Upon the occurrence of a default hereunder, if all or any part
of the Leased Premises are then assigned or sublet, Landlord, in addition to any
other remedies provided by this Lease or by law, may, at its option, collect
directly from the assignee or subtenant all rent becoming due to Landlord by
reason of the assignment or subletting. Any collection by Landlord from the
assignee or subtenant shall not be construed to constitute a waiver or release
of Tenant from the further performance of its obligations under this Lease or
the making of a new lease with such assignee or subtenant. If Tenant shall make
any assignment or sublease, with Landlord's consent, for a rental in excess of
the rent payable under this Lease (including any applicable escalations), after
deducting reasonable and customary expenses incurred by Tenant in connection
therewith and paying to Landlord reasonable and customary expenses incurred by
it in connection therewith, Tenant shall retain fifty percent (50%) of such
excess and shall pay the remaining fifty percent (50%) to Landlord.
Notwithstanding anything in this Article 13 to the contrary, Tenant shall have
the right to sublease not exceeding ten thousand (10,000) rentable square feet
of the Leased Premises to any reputable third party.
Landlord may, in the reasonable exercise of its discretion, refuse to give its
consent to any proposed assignment or subletting for any reason (other than the
creditworthiness of the proposed assignee or subtenant), including, but not
limited to Landlord's determination that its interest in the Lease or the Leased
Premises would be adversely affected by (i) the business reputation of the
proposed assignee or subtenant, (ii) the prevailing market or quoted rental
rates for space in the Building or other comparable buildings, or (iii) the
proposed use of the Leased Premises by, or business of, the proposed assignee or
subtenant. If Landlord refuses to give its consent to any proposed assignment
14
or subletting, Landlord may, at its option, within thirty (30) days after
receiving notice of the proposal, terminate this Lease in the case of a proposed
assignment, or in the case of proposed subletting, terminate this Lease with
respect to the portion of the Leased Premises proposed to be sublet, by giving
Tenant thirty (30) days prior written notice of such termination, whereupon this
Lease (in the case of a proposed assignment), or portion of the Lease with
respect to the proposed area to be sublet, shall terminate.
ARTICLE 14 -- TRANSFERS BY LANDLORD
Section 14.01. Sale and Conveyance of the Building. Landlord shall have the
right to sell and convey the Building at any time during the term of this Lease,
subject only to the rights of Tenant hereunder; and such sale and conveyance
shall operate to release Landlord from liability hereunder after the date of
such conveyance as provided in Section 15.04.
Section 14.02. Subordination. Landlord shall have the right to subordinate this
Lease to any mortgage or deed of trust (herein a "mortgage") presently existing
or hereafter placed upon the Building by so declaring in such mortgage, and the
recording of any such mortgage shall make it prior and superior to this Lease
regardless of the date of execution or recording of either document; provided
that Landlord shall cause the holder of such mortgage or trustee to execute and
deliver to Tenant for its execution a subordination, nondisturbance and
attornment agreement which provides, among other things, that so long as no
default has occurred and is continuing beyond the period of time allowed for the
remedy thereof under the terms of this Lease, the holder of the mortgage or
trustee (i) shall not disturb Tenant's leasehold interest or possession of the
Leased Premises in accordance with the terms hereof, and (ii) waives all rights
or interests in any trade fixture of either Tenant or any of its subtenants.
Prior to Tenant taking occupancy of the Leased Premises, Landlord shall deliver
to Tenant a subordination, nondisturbance and attornment agreement in accordance
with the terms of the preceding sentence with respect to each mortgage or trust
deed then constituting a lien against the Leased Premises or the Building of
which the Leased Premises are a part. Within ten (10) days of Landlord's
delivery thereof to Tenant, Tenant shall execute and deliver to Landlord,
without cost, a subordination, nondisturbance and attornment agreement in such
form as reasonably may be deemed necessary or desirable by Landlord or its
mortgagee to confirm the subordination of this Lease. Within ten (10) days of
Landlord's written request therefor, Tenant also shall deliver to Landlord an
Estoppel Certificate in the form attached hereto as Exhibit D. Tenant shall, in
the event any proceedings are brought for the foreclosure of any such mortgage,
attorn to the purchaser upon any such foreclosure and recognize such purchaser
as the landlord under this Lease.
ARTICLE 15 -- DEFAULTS AND-REMEDIES
Section 15.01. Defaults by Tenant. The occurrence of any one or more of the
following events shall be a default under and breach of this Lease by Tenant:
A. Tenant shall fail to pay any Monthly Rental Installment of Minimum Annual
Rent or the Annual Rental Adjustment or any other amounts due Landlord from
Tenant as additional rent or otherwise within five (5) days after receipt
of notice from Landlord that such payment is due or past due; provided,
however, that with respect to Monthly Rental Installments, Landlord shall
be required to give such notice to Tenant only two times during any twelve
(12) month period before Tenant's failure to make such Monthly Rental
Installments on a timely basis shall constitute a default hereunder.
B. Tenant shall fail to perform or observe any term, condition, covenant or
obligation required to be performed or observed by it under this Lease
(other than those referenced in subsection 15.01(A) hereof) for a period of
thirty (30) days after notice thereof from Landlord; provided, however,
that if the term, condition, covenant or obligation to be performed by
Tenant is of such nature that the same cannot reasonably be performed
within such thirty (30) day period, such default shall be deemed to have
been cured if Tenant commences such performance within said thirty (30) day
period and thereafter diligently undertakes to complete the same and does
so complete the required action within a time deemed to be reasonable by
Landlord.
C. Tenant shall vacate, abandon or fail to occupy the Leased Premises or any
substantial portion thereof for a period of not less than thirty (30)
consecutive days following the Commencement Date.
15
D. A trustee or receiver shall be appointed to take possession of
substantially all of Tenant's assets in, on or about the Leased Premises or
of Tenant's interest in this Lease (and Tenant does not regain possession
within sixty (60) days after such appointment); Tenant shall make an
assignment for the benefit of creditors; or substantially all of Tenant's
assets in, on or about the Leased Premises or Tenant's interest in this
Lease shall be attached or levied under execution (and Tenant does not
discharge the same within sixty (60) days thereafter).
E. A petition in bankruptcy, insolvency, or for reorganization or arrangement
shall be filed by or against Tenant pursuant to any federal or state
statute (and, with respect to any such petition filed against it, Tenant
fails to secure a stay or discharge thereof within sixty (60) days after
the filing of the same).
Section 15.02. Remedies of Landlord. Upon the occurrence of any event of default
set forth in Section 15.01, Landlord shall have the following rights and
remedies, in addition to those allowed by law, any one or more of which may be
exercised at Landlord's option without further notice to or demand upon Tenant:
A. Landlord may apply the security deposit and/or re-enter the Leased
Premises and cure any default of Tenant, in which event Tenant shall
reimburse Landlord as additional rent for any costs and expenses that
Landlord may incur to cure such default; and Landlord shall not be
liable to Tenant for any loss or damage that Tenant may sustain by
reason of Landlord's action unless caused by reckless or willful
misconduct on the part of Landlord.
B. 1. Landlord may terminate this Lease as of the date of such default, in
which event: (i) neither Tenant nor any person claiming under or
through Tenant shall thereafter be entitled to possession of the
Leased Premises, and Tenant shall immediately thereafter surrender the
Leased Premises to Landlord; (ii) Landlord may re-enter the Leased
Premises and dispossess Tenant or any other occupants of the Leased
Premises by force, summary proceedings, ejectment or otherwise, and
may remove their effects, without prejudice to any other remedy that
Landlord may have for possession or arrearages in rent or other sums
due hereunder; and (iii) notwithstanding the termination of this
Lease, Landlord may declare all rent that would have been due under
this Lease for the balance of the teen to be immediately due and
payable, whereupon Tenant shall be obligated to pay the same to
Landlord, together with all loss or damage that Landlord may sustain
by reason of such termination, less an amount equal to the reasonable
rental value of the Leased Premises for the remainder of the term of
this Lease (taking into account expenses of re-letting), it being
expressly understood and agreed that the liabilities and remedies
specified in this Subsection (B)(1) of Section 15.02 shall survive the
termination of this Lease and that all amounts referred to herein
shall be discounted to present value based on the market rate then
customarily applicable to such situations; or
2. Landlord may, without terminating this Lease, re-enter the Leased
Premises and re-let all or any part of the Leased Premises for a term
different from that which otherwise would have constituted the balance
of the term of this Lease and for rent and on terms and conditions
different from those contained herein, whereupon Tenant shall be
obligated to pay to Landlord as liquidated damages the difference
between the rent provided for herein and that provided for in any
lease covering a subsequent re-letting of the Leased Premises, for the
period that otherwise would have constituted the balance of the term
of this Lease, together with all of Landlord's reasonable costs and
expenses for preparing the Leased Premises for re-letting, including
all repairs, tenant finish improvements, brokers' and attorneys' fees,
and all loss or damage that Landlord may sustain by reason of such
re-entry and re-letting. Landlord shall use reasonable efforts to
mitigate its damages by reletting the Leased Premises on commercially
reasonable terms; provided, however, that such shall not require
Landlord to relet the Leased Premises on the same terms and conditions
as set forth herein.
C. Landlord may ▇▇▇ for injunctive relief or to recover damages for any loss
resulting from the breach.
D. In the event that Tenant fails to pay within ten (10) days of the date due
and payable any Monthly Rental Installment of Minimum Annual Rent or any
monthly installment of the Annual Rental Adjustment, Tenant
16
shall pay to Landlord, to the fullest extent permitted by applicable law, a
late charge of four percent (4%) of the amount due and unpaid in order to
compensate Landlord for the costs and expenses of administering, handling
and processing late payments.
E. In the event Tenant fails to pay within thirty (30) days after the same is
due and payable any Monthly Rental Installment of Minimum Annual Rent, any
monthly installment of the Annual Rental Adjustment, or any other sum or
charge required to be paid by Tenant to .Landlord, such unpaid amount shall
bear interest from the due date thereof to the date of payment at the
Delinquency Interest Rate until paid.
Section 15.03. Default by Landlord and Remedies of Tenant. It shall be a default
under and breach of this Lease by Landlord if it shall fail to perform or
observe any term, condition, covenant or obligation required to be performed or
observed by it under this Lease for a period of thirty (30) days after notice
thereof from Tenant; provided, however, that if the term, condition, covenant or
obligation to be performed by Landlord is of such nature that the same cannot
reasonably be performed within such thirty (30) day period; such default shall
be deemed to have been cured if Landlord commences such performance within said
thirty (30) day period and thereafter diligently undertakes to complete the
same. So long as the Leased Premises remain suitable for Tenant's proposed use,
Tenant shall not be entitled to terminate this Lease as a result of any such
default. However, in the event Landlord does not cure the above described
default in the applicable time period, then in such event Tenant may do all
things necessary to remedy such default and perform the obligations of Landlord
which have not been fully or property performed. Landlord shall reimburse Tenant
promptly for all costs and expenses reasonably incurred by Tenant in connection
with the foregoing following Landlord's receipt of an itemized invoice therefor.
If Landlord fails to make such payment within 60 days of Tenant's written
demand, Tenant may deduct said amount from Tenant's next Monthly Rental
Installment then due.
Section 15.04. Non-Waiver of Defaults. The failure or delay by either party
hereto to exercise or enforce at any time any of the rights or remedies or other
provisions of this Lease shall not be construed to be a waiver thereof, nor
affect the validity of any part of this Lease or the right of either party
thereafter to exercise or enforce each and every such right or remedy or other
provision. No waiver of any default and/or breach of this Lease shall be deemed
to be a waiver of any other default and/or breach. The receipt by Landlord of
less than the full rent due shall not be construed to be other than a payment on
account of rent then due, nor shall any statement on Tenant's check or any
letter accompanying Tenant's check be deemed an accord and satisfaction, and
Landlord may accept such payment without prejudice to Landlord's right to
recover the balance of the rent due or to pursue any other remedies provided in
this Lease. No act or omission by Landlord or its employees or agents during the
term of this Lease shall be deemed an acceptance of a surrender of the Leased
Premises, and no agreement to accept such a surrender shall be valid unless in
writing and signed by Landlord.
Section 15.05. Attorneys' Fees. In the event either party defaults in the
performance or observance of any of the terms, conditions, covenants or
obligations contained in this Lease and the nondefaulting party employs
attorneys to enforce all or any part of this Lease, collect any rent due or to
become due or recover possession of the Leased Premises, the defaulting party
agrees to reimburse the nondefaulting party for the attorneys' fees incurred
thereby once a default is determined to have occurred, whether by judgment or
otherwise.
ARTICLE 16 -- LANDLORD'S RIGHT TO RELOCATE TENANT
None. Intentionally omitted.
ARTICLE 17 -- NOTICE AND PLACE OF PAYMENT
Section 17.01. Notices. Any notice required or permitted to be given under this
Lease or by law shall be deemed to have been given if it is written and
delivered in person or mailed by registered or certified mail, postage prepaid,
to the party who is to receive such notice at the address specified in Item N of
the Basic Lease Provisions. When so mailed, the notice shall be deemed to have
been given as of the date it was mailed. The address specified in Item N of the
Basic Lease Provisions may be changed by giving written notice thereof to the
other party.
17
Section 17.02. Place of Payment. All rent and other payments required to be made
by Tenant to Landlord shall be delivered or mailed to Landlord's management
agent at the address specified in Item N of the Basic Lease Provisions or any
other address Landlord may specify from time to time by written notice given to
Tenant.
ARTICLE 18 -- ENVIRONMENTAL REPRESENTATIONS, COVENANTS AND INDEMNITIES
A. Tenant shall comply with all rules, laws, orders, ordinances, directions,
regulations and requirements pertaining to air and water quality, Hazardous
Materials (as hereinafter defined), waste disposal, air emissions and other
environmental matters.
B. Any Hazardous Materials brought upon, kept or used in or about the Leased
Premises by Tenant, its agents, employees, contractors or invitees shall be
used, kept and stored in a manner that complies with all laws regulating
such Hazardous Materials. No Hazardous Materials shall be brought upon,
kept or used in or about the Leased Premises unless such Hazardous
Materials are necessary or useful to Tenant's business as specified in Item
J of the Basic Lease Provisions.
C. Tenant shall indemnify, defend and hold Landlord harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, diminution in value of the Leased Premises
or the Building, damages for the loss or restriction on use of rentable or
usable space, damages arising from any adverse impact on marketing of space
in the Building, and sums paid in settlement of claims, attorneys' fees,
consultant fees and expert fees) that arise during or after the term of
this Lease in connection with contamination of the Leased Premises or the
Building by Hazardous Materials as a result of Tenant's use or activities,
or the activities of Tenant's invitees, employees, agents or contractors.
This indemnification of Landlord by Tenant includes, without limitation,
costs incurred in connection with any investigation of site conditions or
any clean-up, remedial, removal or restoration work required by any
federal, state or local governmental agency or political subdivision.
Without limiting the foregoing, if the presence of any Hazardous Material
in the Leased Premises or the Building caused or permitted by Tenant, its
invitees, employees, agents, contractors or invitees results in any
contamination of the Leased Premises of the Building, Tenant shall promptly
take all actions at its sole expense as are necessary to return the Leased
Premises and/or the Building to the condition existing prior to the
presence of any such Hazardous Materials; provided that Landlord's approval
of such actions shall first be obtained, which approval shall not be
unreasonably withheld. The foregoing indemnity and covenants shall survive
the expiration or earlier termination of this Lease.
D. As used herein, the term "Hazardous Materials" means any hazardous or toxic
substances, materials or wastes, including, but not limited, to those
substances, materials or wastes listed in the United States Department of
Transportation Hazardous Materials Table (49 CFR 172.101) or designated by
the United States Environmental Protection Agency as hazardous substances
(40 CFR Part 302) or hazardous waste (40 CFR Part 261), petroleum products,
asbestos and such other substances, materials and wastes that are or become
regulated under any applicable state, federal or local law, rule,
regulation or ordinance.
E. Landlord represents and warrants to Tenant that, to the best of Landlord's
knowledge, neither the Land nor the Building contains any Hazardous
Materials in violation of applicable law.
ARTICLE 19 -- MISCELLANEOUS GENERAL PROVISIONS
Section 19.01. Condition of Premises. Tenant acknowledges that neither Landlord
nor any agent of Landlord has made any representation or warranty with respect
to the Leased Premises or the Building or with respect to the suitability or
condition of any part of the Building for the conduct of Tenant's business
except as provided in this Lease.
Section 19.02. Insolvency or Bankruptcy. In no event shall this Lease be
assigned or assignable by operation of law, and in no event shall this Lease be
an asset of Tenant in any receivership, bankruptcy, insolvency or reorganization
proceeding.
18
Section 19.03. Common Areas. The term Common Areas, as used in this Lease,
refers to the areas of the Building and the land described in Exhibit A-1 that
are designed for use in common by all tenants of the Building and their
respective employees, agents, customers, invitees and others, and includes, by
way of illustration and not limitation, entrances and exits, hallways and
stairwells, elevators, restrooms, sidewalks, driveways, parking areas,
landscaped areas and other areas as may be designated by Landlord as part of the
Common Areas of the Building. Tenant shall have the non-exclusive right, in
common with others, to the use of the Common Areas, subject to such
nondiscriminatory rules and regulations as may be adopted from time to time by
Landlord including those set forth in Section 5.02 and Exhibit C of this Lease.
Section 19.04. Choice of Law. This Lease shall be governed by and construed
pursuant to the laws of the State of Tennessee.
Section 19.05. Successors and Assigns. Except as otherwise provided in this
Lease, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
Section 19.06. Name. Tenant shall not, without the written consent of Landlord,
use the name of the Building for any purpose other than as the address of the
business to be conducted by Tenant in the Leased Premises, and in no event shall
Tenant acquire any rights in or to such name.
Section 19.07. Examination of Lease. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
Section 19.08. Time. Time is of the essence of this Lease and each and all of
its provisions.
Section 19.09. Defined Terms and Headings. The words "Landlord" and "Tenant" as
used herein shall include the plural as well as the singular. If more than one
person is named as Tenant, the obligations of such persons are joint and
several. The headings and titles to the articles and sections of this Lease are
not a part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.
Section 19.10. Prior Agreements; Amendments in Writing. This Lease and the
letter of understanding executed pursuant to Section 2.03 hereof contain all of
the agreements of the parties hereto with respect to any matter covered or
mentioned in this Lease, and no prior agreement, understanding or representation
pertaining to any such matter shall be effective for any purpose. No provision
of this Lease may be amended or agreed to except by an agreement in writing
signed by the parties hereto or their respective successors in interest.
Section 19.11. Payment of and Indemnification for Leasing Commissions. The
parties hereby acknowledge, represent and warrant that the only real estate
broker or brokers involved in the negotiation and execution of this Lease is
that (or are those) named in Item I of the Basic Lease Provisions and that no
other broker or person is entitled to any leasing commission or compensation as
a result of the negotiation or execution of this Lease. Tenant hereby
indemnifies and holds Landlord harmless from any and all liability for the
breach of any such representation and warranty on its part and shall pay any
compensation to any other broker or person who maybe deemed or held to be
entitled thereto.
Section 19.12. Sever ability of Invalid Provisions. If any provision of this
Lease shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall not be affected or impaired, and such remaining
provisions shall remain in full force and effect.
Section 19.13. Estoppel Certificate. Tenant shall; within ten (10) days
following receipt of a written request from Landlord, execute, acknowledge and
deliver to Landlord or to any lender, purchaser or prospective lender or
purchaser designated by Landlord a written statement, in the form attached
hereto as Exhibit D or in such other form as Landlord may, in the exercise of
its normal business judgment, request, certifying (i) that this Lease is in full
force and effect and unmodified (or, if modified, stating the nature of such
modification), (ii) the date to which rent has been paid, and (iii) that there
are not, to Tenant's knowledge, any uncured defaults (or specifying such
defaults
19
if any are claimed). Any prospective purchaser or mortgagee of all or
any part of the Building may rely upon any such statement:
Section 19.14. Services Performed by Landlord. Any services that Landlord is
required to furnish pursuant to the provisions of this Lease may, at Landlord's
option, be furnished from time to time, in whole or in part, by employees of
Landlord, by the managing agent of the Building, or by one or more third
persons; and Landlord further reserves the right to require Tenant to enter into
agreements with such third persons in form and content approved by Landlord for
the furnishing of such services; provided, however, that in no event shall
Landlord be relieved of its obligation to furnish such services as provided for
in this Lease.
Section 19.15. Force Majeure. Landlord shall be excused for the period of any
delay in the performance of any obligation hereunder when such delay is
occasioned by causes beyond its control, including, but not limited to, war,
invasion or hostility; work stoppages, boycotts, slowdowns or strikes; shortages
of materials, equipment, labor or energy; man-made or natural casualties;
unusual weather conditions or other acts of God; acts or omissions of
governmental or political bodies; or civil disturbances or riots.
Section 19.16. Building Compliance. Notwithstanding any wording to the contrary.
Landlord warrants that Building and Common Areas comply with Government Rules
and Regulations and such ADA requirements in effect at the time of Lease
commencement.
Section 19.17. Consents. Whenever this Lease provides for the consent of the
Landlord or the Tenant, such consent shall not be unreasonably withheld or
delayed.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and year first above written.
LANDLORD:
▇▇▇▇▇▇ HILLS IV PARTNERS
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇,
Managing General Partner
TENANT:
SYMBION, INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
Title: CEO
----------------------------------
20
STATE OF TENNESSEE
COUNTY OF DAVIDSON
Personally appeared before me, the undersigned, a Notary Public in and
for the State and County aforesaid, ▇▇▇▇ ▇. ▇▇▇▇▇▇, as Managing General Partner
of ▇▇▇▇▇▇ Hills IV, the within named bargainer, a partnership, with whom I am
personally acquainted (or proved to me on the basis of satisfactory evidence),
and that as such partner, he executed the foregoing instrument for the purposes
therein contained, by signing the name of the partnership by himself as such
partner.
WITNESS my hand, at office, this 20th day of June, 2001.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Notary Public
My Commission Expires:
March 27, 2004
----------------------
STATE OF TENNESSEE
COUNTY OF DAVIDSON
Before me, the undersigned, a Notary Public in and for the State and
County aforesaid, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ with whom I am
personally acquainted (or proved to me on the basis of satisfactory evidence),
and who, upon oath, acknowledged himself to be the CEO of SYMBION, INC, the
within named bargainer, a corporation, and that as such officer, he executed the
foregoing instrument for the purposes therein contained, by signing the name of
the corporation by himself as such officer.
WITNESS my hand, at office, this 20th day of June, 2001.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Notary Public
My Commission Expires:
May 30, 2004
---------------------------
21
SCHEDULE OF EXHIBITS
Exhibit A-1 Description of Land
Exhibit A-2 Description/Depiction of Leased Premises
Exhibit B Leasehold Improvements With Respect to the Leased Premises
Exhibit C Rules and Regulations
Exhibit D Estoppel Certificate
Exhibit E Commencement Date Agreement
Exhibit F Work Letter Agreement
Exhibit G Special Stipulations
Exhibit H Janitorial Services
Exhibit I Building Systems and Technology
22
EXHIBIT A-1
Description of Land
Land in Davidson County, Tennessee, being Parcel 17, Tract 17 on the Plan of the
Resubdivision of ▇▇▇▇▇▇ ▇, ▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, of record in Book 6250,
page 978, as amended in Book 6900, page 304, Register's Office for Davidson
County, Tennessee, to which plat reference is hereby made for a more complete
description.
Being the same property conveyed to ▇▇▇▇▇▇ Hills IV Partners by deed from
Phycor, Inc., of record as Instrument No. 20001229-0127500, Register's Office
for Davidson County, Tennessee.
23
EXHIBIT A-2
Description/Depiction of Leased Premises
FULL FLOOR OCCUPANCY
[INSERT 5TH FLOOR PLAN GRAPHIC]
24
EXHIBIT A-2 CONTINUED
PARTIAL FLOOR OCCUPANCY AS SHOWN
[INSERT FOURTH FLOOR PLAN GRAPHIC]
25
EXHIBIT B
Leasehold Improvements With Respect To Leased Premises
The work to be performed by Landlord or Landlord's Contractor within
and with respect to the Leased Premises consists of the performance and
completion of the Landlord's Work, which completes the Leased Premises to Shell
Condition, and the Tenant's Work, which consists of the required tenant finish
improvements constructed in accordance with plans and specifications presented
by Tenant and approved by Landlord, such approval not to be unreasonably
withheld or delayed; provided, however, that Landlord's shall not be obligated
to spend more than $21.50 per rentable square foot of space in the Leased
Premises on Tenant's Work. Tenant shall pay to Landlord the cost of Tenant's
Work that exceeds the Allowance ($21.50 per rentable square foot) within 30 days
after receipt of written notice from Landlord.
All capitalized words in this Exhibit B shall be deemed to have the
meanings ascribed to them in this Lease, including without limitation, in the
Work Letter Agreement attached as Exhibit F.
26
EXHIBIT C
RULES AND REGULATIONS
l. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors and halls shall not be obstructed or used for any purpose
other than ingress and egress.
2. No awnings or other projections shall be attached to the outside
walls of the Building. No curtains, blinds, shades or screens shall be attached
to or hung in, or used in connection with, any window or door of the Leased
Premises other than Landlord standard window treatments without Landlord's prior
written approval. All electric ceiling fixtures hung in offices or spaces along
the perimeter of the Building must be fluorescent, of a quality, type, design
and bulb color approved by Landlord. Neither the interior nor the exterior of
any windows shall be coated or otherwise sun screened without written consent of
Landlord.
3. Unless expressly permitted in a tenant's lease, no sign,
advertisement, notice or handbill shall be exhibited, distributed, painted or
affixed by any tenant on, about or from any part of the Leased Premises or the
Building without the prior written consent of Landlord. In the event of a
violation of the foregoing by any tenant, Landlord may. remove or stop it
without any liability, and may charge the expense incurred in such removal or
stopping to tenant. Standard interior signs on doors and directory tablet shall
be inscribed, painted or affixed for each tenant by the Landlord, at the expense
of such tenant, and shall be of a size, color and style acceptable to Landlord.
The directory tablet will be provided exclusively for the display of the name
and location of tenants only, and Landlord reserves the right to exclude any
other names therefrom. Nothing may be placed on the exterior of corridor walls
or corridor doors other than Landlord's standard lettering.
4. The sashes, sash doors, windows and doors that reflect or admit
light and air into halls, passageways or other public places in the Building
shall not be covered or obstructed by any tenant, nor shall any bottles, parcels
or other articles be placed on the window ▇▇▇▇▇.
5. The water and wash closets and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the tenant
who, or whose subtenants, assignees or any of their servants, employees, gents,
visitors or licensees shall have caused the same.
6. No tenant shall ▇▇▇▇, paint, drill into or in any way deface any
part of the Leased Premises or the Building. No boring, cutting or stringing of
wires or laying of linoleum or other similar floor coverings shall be permitted,
except with the prior written consent of the Landlord and as the Landlord may
direct.
7. No bicycles, vehicles, birds or animals of any kind shall be brought
into or kept in or about the Leased Premises, and no cooking shall be done or
permitted by any tenant on the Leased Premises, except that the preparation of
coffee, tea, hot chocolate and similar items for Tenants and their employees
shall be permitted provided power shall not exceed that amount which can be
provided by a 30 ampere circuit. No Tenant shall cause or permit any unusual or
objectionable odors to be produced in or permeate the Leased Premises.
8. The Leased Premises shall not be used for manufacturing or for the
storage of merchandise except as such storage may be incidental to the permitted
use of the Leased Premises. No tenant shall occupy or permit any portion of the
Leased Premises to be occupied as an office for the manufacture or sale of
liquor, narcotics or tobacco in any form, or as a ▇▇▇▇▇▇ or manicure shop, or as
an employment bureau without the express written consent of Landlord. The Leased
Premises shall not be used for lodging or sleeping or for any immoral or illegal
purpose.
9. No tenant shall make or permit to be made any unseemly or disturbing
noises or disturb or interfere with occupants of this or neighboring buildings
or premises or those having business with them whether by the use of any musical
instrument, radio, phonograph or unusual noise, or in any other way. No tenant
shall throw anything out of doors, windows or down the passageways.
27
10. No tenant, subtenant or assignee nor any of its servants,
employees, agents, visitors or licensees shall at any time bring or keep upon
the Leased Premises any inflammable, combustible or explosive fluid, chemical or
substance.
11. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanism thereof. Each Tenant must upon the termination of his
tenancy, restore to the Landlord all keys of stores, offices and toilet rooms
furnished to, or otherwise procured by, such tenant and in the event of the loss
of keys so furnished, such tenant shall pay to the Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
12. All removals or the carrying in or out of any safes, freight,
furniture or bulky matter of any description must take place during the hours
that Landlord shall reasonably determine from time to time. The moving of safes
or other fixtures or bulky matter of any kind must be done upon Previous notice
to the manager of the Building and under its supervision, and the persons
employed by any tenant for such work must be acceptable to Landlord. Landlord
reserves the right to inspect all safes, freight or other bulky articles to be
brought into the Building and to exclude from the Building all safes, freight or
other bulky articles that violate any of these Rules and Regulations or the
Lease of which these Rules and Regulations are a part. The Landlord reserves the
right to prescribe the weight and position of all safes, which must be placed
upon supports approved by Landlord to distribute the weight.
13. No tenant shall purchase water, ice, towel, janitorial or
maintenance or other like services from any person or persons not approved by
Landlord.
14. Landlord shall have the right to prohibit any advertising by any
tenant that, in Landlord's opinion, tends to impair the reputation of the
Building or its desirability as an office location, and upon written notice from
Landlord any tenant shall refrain from or discontinue such advertising.
15. Landlord reserves the right to exclude from the Building between
the hours of 6 p.m. and 8 a.m. and at all hours on Sunday and legal holidays all
persons who do not present a pass to the Building approved by Landlord. Landlord
will furnish passes to persons for whom any tenant requests the same in writing.
Each tenant shall be responsible for all persons for whom he requests passes and
shall be liable to Landlord for all acts of such persons. Landlord shall in no
case be liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. In case of an invasion, mob riot,
public excitement or other circumstances rendering such action advisable in
Landlord's opinion, Landlord reserves the right without any abatement of rent to
require all persons to vacate the Building and to prevent access to the Building
during the continuance of the same for the safety of the Tenants and the
protection of the Building and the property in the Building.
16. Any persons employed by any tenant to do janitorial work shall,
while in the Building and outside of the Leased Premises, be subject to and
under the control and direction of the manager of the Building but novas an
agent or servant of said superintendent or of the Landlord, and such tenant
shall be responsible for all acts of such persons.
17. All doors opening onto public corridors shall be kept closed,
except when in use for ingress and egress.
18. The requirements of tenant will be attended to only upon
application to the Managing General Partner of Landlord or to the management
agent designated thereby.
19. Canvassing, soliciting and peddling in the Building are prohibited,
and each tenant shall report and otherwise cooperate to prevent the same.
20. All office equipment of any electrical or mechanical nature shall
be placed by Tenant in the Leased Premises in settings approved by Landlord to
absorb or prevent any vibration, noise or annoyance.
28
21. No air conditioning unit or other similar apparatus shall be
installed or used by any tenant without the written consent of Landlord.
22. There shall not be used in any space, or in the public halls of the
Building, either by any Tenant or others, any hand trucks except those equipped
with rubber tires and rubber side guards.
23. No vending machine or machines of any description shall be
installed, maintained or operated within the Leased Premises without the written
consent of Landlord.
24. The scheduling of Tenant move-ins shall be subject to the
reasonable discretion of Landlord.
29
EXHIBIT D
ESTOPPEL CERTIFICATE
PREMISES: Suites __________ ▇▇▇▇▇▇ Hills IV ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
LEASE DATED:
LANDLORD: ▇▇▇▇▇▇ Hills IV Partners.
TENANT: Symbion, Inc.
The undersigned, the tenant under the above lease, certifies to, the
mortgagee or purchaser of the above premises, that said lease is presently in
full force and effect and unmodified except as indicated at the end of this
certificate; that the term thereof has commenced and full rental is now accruing
thereunder; that the undersigned has accepted possession of said premises and
that any improvements required by the terms of said lease to be made by the
Landlord have been completed to the satisfaction of the undersigned; that no
rent under said lease has been paid more than thirty (30) days in advance of its
due date; that the undersigned, as of this date, has no charge, lien or claim of
offset under said lease or otherwise against rents or other charges due or to
become due thereunder; and that there are no presently existing defaults on the
part of the Landlord under the lease except as indicated at the end of this
certificate.
Dated ______________, 2002.
TENANT:
SYMBION, INC.
By: ___________________________________
Title: ___________________________________
30
EXHIBIT E
COMMENCEMENT DATE AGREEMENT
Agreement made this _____ day of _____________, 2002, between ▇▇▇▇▇▇
Hills IV Partners (hereinafter referred to as "Landlord"), and Symbion, Inc.
(hereinafter referred to as "Tenant").
WHEREAS, Landlord and Tenant entered into a lease dated
_______________, 2001 (hereinafter referred to as the "Lease") for approximately
45,000 rentable square feet in the building known as ▇▇▇▇▇▇ Hills IV;
NOW, THEREFORE, pursuant to the provisions of Section 2.03 of the
Lease, Landlord and Tenant mutually agree to as follows:
1. The Commencement Date of the Lease Term is [November 1, 2002]. The
Expiration Date of the Lease Term is [October 31, 2012]:
2. Tenant is in possession of, and has accepted, the Premises demised by
the Lease, and acknowledges that all the work to be performed by
Landlord in the Premises as required by the terms of the Lease has been
satisfactorily completed. Tenant further certifies that all conditions
of the Lease required of Landlord as of this date have been fulfilled
and there are no defenses or off-sets against the enforcement of the
Lease by Landlord.
3. The actual number of rentable square feet within the Leased Premises is
______________ and accordingly, the Minimum Annual Rent is as follows:
Year 1: $24.00/RSF $__________ Annually $___________ Monthly
Year 2: $24.00/RSF $__________ Annually $___________ Monthly
Year 3: $24.00/RSF $__________ Annually $___________ Monthly
Year 4: $26.00/RSF $__________ Annually $___________ Monthly
Year 5: $26.00/RSF $__________ Annually $___________ Monthly
Year 6: $27.00/RSF $__________ Annually $___________ Monthly
Year 7: $27.00/RSF $__________ Annually $___________ Monthly
Year 8: $28.000/RSF $__________ Annually $___________ Monthly
Year 9: $28.000/RSF $__________ Annually $___________ Monthly
Year 10: $28.000/RSF $__________ Annually $___________ Monthly
IN WITNESS, WHEREOF, the parties hereto have signed and sealed this
Agreement, the ____ day of ______________, 2001.
LANDLORD:
▇▇▇▇▇▇ HILLS IV PARTNERS,
a Tennessee General Partnership
By:
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇,
Managing General Partner
TENANT:
SYMBION, INC.
By:
------------------------------------------
Title:
------------------------------------------
31
EXHIBIT F
WORK LETTER AGREEMENT
TO LEASE BY AND BETWEEN
▇▇▇▇▇▇ HILLS IV PARTNERS,
AS LANDLORD, AND
SYMBION, INC.
AS TENANT
SYMBION, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Entire rentable area of the top (fifth (5th)) floor and a portion
of the fourth (4th) floor of ▇▇▇▇▇▇ Hills IV ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Gentlemen:
You (hereinafter referred to as "Tenant") and we (hereinafter referred
to as "Landlord'") are executing, simultaneously with this Work Letter Agreement
(herein so called), a written lease ("Lease") covering the space referred to
above (hereinafter called the "Leased Premises").
To induce Tenant to enter into said Lease (which is hereby incorporated
by reference to the extent that the provisions of this Work Letter Agreement may
apply thereto) and in consideration of the mutual covenants hereinafter
contained, Landlord and Tenant mutually agree as follows:
1. DEFINITIONS. The terms defined in this Paragraph 1, for all purposes of
this Work Letter Agreement; shall have the meanings herein specified,
and, in addition to the terms defined herein, the definitions in the
Lease shall also apply to this Work Letter Agreement.
1.1. "Shell Condition" shall mean the condition' of the Building
substantially completed with the following improvements: (i)
outside walls and smooth and level concrete floors ready for
carpet or other floor covering; (ii) Building Standard
(hereinafter defined) acoustic tile ceiling grid system
installed throughout (with uninstalled ceiling materials
available from Landlord) with height at 10 feet except where
otherwise noted to clear perimeter windows and with Building
Standard drapery pocket or soffit detail provided; (iii)
Building Standard power supplied to panels provided on floors
(providing power with a capacity of at least 8 ▇▇▇▇▇/RSF);
(iv) power grid for lighting installed in ceiling (with eight
light fixtures per 1,000 SF stacked on floor in Leased
Premises); (v) men's and women's restroom facilities with
Building Standard finishes located on each floor; (vi)
multi-zone, roof mounted HVAC system capable of providing 1.75
CFM/RSF of fresh air and an air temperature of 56 degrees
Fahrenheit at the base building shaft completed to base
building (with five Building Standard diffusers per 1,000 SF
stacked on floor in Leased Premises); thermostats located (but
not installed) in the ceilings near VAV boxes; any
modifications to base building would be inclusive in tenant
build-out; (vii) main elevator-lobby of the Building; (viii)
freight elevator operational for contractors and
subcontractors to enable them to perform tenant finish
construction work; (ix) sprinkler risers and main loop on each
floor of Building; (x) as to the Leased Premises, two (2)
means of ingress/egress, with doors, frames and hardware
approved by Tenant; (xi) demising walls and columns taped,
beaded and sanded, ready for paint or wall covering; and (xii)
telephone equipment room located on each floor; (xiii)
Building Standard window coverings installed.
1.2. "Dried in Condition" shall mean the condition of the Leased
Premises when Landlord has (a) provided reasonable vertical
transportation to such phase of the Leased Premises to permit
Tenant's' Work (hereinafter defined) to commence and proceed,
(b) completed the outside walls
32
and unfinished concrete floors of the next higher Building
level to the extent necessary to protect the Leased Premises
from the elements, and (c) provided access to Building
Standard Utilities on each floor on which the phase of the
Leased Premises in question is located.
1.3. "Building Standard" shall mean the quantity and quality of
materials, finishing and workmanship specified by Landlord in
the plans and specifications for the Building.
1.4. "Landlord's Work" shall mean the Building Standard items which
are supplied, installed and finished by Landlord, according to
Building Standard specifications and which complete the Leased
Premises to Shell Condition. Landlord's Work also shall
include all items necessary to cause the Building to be in
compliance with all applicable laws, building codes and
regulations, including the Americans with Disabilities Act.
1.5. "Tenant's Work" shall mean the items which are supplied,
installed and finished by Landlord on behalf of Tenant (unless
Tenant elects to supply, install and finish such items), as
provided for herein below, which exceed Shell Condition, and
which shall be paid for by Landlord or Tenant as provided for
herein below, including without limitation, architectural and
engineering documents.
1.6. "Expenditure Authorization" shall mean an authorization by
Tenant to Landlord to expend funds on behalf of Tenant for
Tenant's Work on the Leased Premises.
1.7. "Landlord's" Contractor" shall mean the person or firm from
time to time selected by Landlord with Tenant's concurrence,
not to be unreasonably withheld or delayed, to perform
Tenant's Work in the Leased Premises.
1.8. "Rentable Area of the Building" shall have the meaning
specified in the Lease.
1.9. "Rentable Area of the Leased Premises" shall have the meaning
specified in this Lease.
1.10. "Leasehold Improvements" shall mean the aggregate of the
Landlord's Work and Tenant's Work.
2. TENANT'S WORK
2.1. Design and Construction of Leasehold Improvements
(a) Unless otherwise agreed to in writing by Landlord and
Tenant, all work involved in completion of Landlord's Work and Tenant's
Work shall be carried out by Landlord's Contractor under the direction
of Landlord, but with Tenant's input on all major areas of concern.
Tenant shall cooperate with Landlord and Landlord's Contractor to
promote the efficient and expeditious completion of such work. Prior to
the latter to occur of (i) September l, 2001, or (ii) one hundred
twenty days after the date of the execution of this Lease by each of
the parties hereto, Landlord shall provide Tenant with a set of base
plans for the Building, architectural renderings thereof, and an
AUTO-CAD CD for floor planning purposes. If any material changes to the
base plans for the Building are made, Landlord will provide Tenant with
updated plans. On or before December 15, 2001, Tenant shall submit to
Landlord plans, drawings, information, instructions and specifications
with respect to Tenant's Work for the Leased Premises, including
without limitation, special finish specifications and/or upgrades if
necessary after Tenant's receipt of the plans, in form sufficient for
submission of same for bidding and pricing the cost of Tenant's Work.
Based on such submissions, Landlord and/or Landlord's Contractor shall
provide Tenant with one or more cost estimates for the Tenant's Work on
or before February 1, 2002. Tenant shall approve such cost estimates,
or cause to be made such changes in the plans and specifications or
cost estimates as may be necessary to reduce the cost of Tenant's Work
to an amount acceptable to Tenant, and then submit final, approved
plans, drawings, information, instructions and specifications and cost
estimates with respect of such Tenant's Work on or before March 1,
2001.
33
(b) Any delay caused by Tenant in connection with the
completion of Tenant's Work by Landlord's Contractor pursuant to this
Section 2.01 shall in no event delay the Commencement Date or the
payment of Rent; provided, however, that any such delay shall extend
the time allowed for Landlord's Contractor to complete the work in
question. By way of illustration, and not in limitation, of the
foregoing:
(i) Any delay caused by Tenant's failure to submit initial or
final plans and specifications or to approve cost estimates
within the time periods set forth in Section 2.01(a) above
shall be charged to Tenant.
(ii) Any delay resulting from failure by Tenant to approve or
reasonably reject any shop drawings, samples, mock-ups, or
models within ten (10) days of submission thereof shall be
charged to Tenant.
(iii) In the event Tenant requires specific products to be
used in completion of Tenant's Work, any delay whatsoever
which results from Tenant's review of shop drawings, samples,
mock-ups, or products, shall be charged to Tenant, and if
Tenant specifies particular suppliers of any material, any
delay which results from a failure by such supplier to comply
with delivery schedules necessary to maintain the normal
progression of the work shall be charged to Tenant.
(iv) Any delay which results from unavailability or delay in
the delivery of any special equipment, including, but not
limited to, computer systems, special communications
equipment, or other equipment not associated with normal
office uses, shall be charged to Tenant.
(v) Any delay which results from Tenant's requests for changes
in the components of the Shell Condition of the Leased
Premises, to the extent such requested changes are not
included in the original plans and specifications for Tenant's
Work submitted for Landlord's approval shall be charged to
Tenant.
(c) Tenant agrees to pay Landlord the cost (labor and
materials) reasonably incurred for all work to complete the Tenant's
Work in excess of the allowance to be provided by Landlord of $21.50
per rentable square foot of space within the Leased Premises (the
"Allowance") within thirty (30) days after being billed therefor.
Landlord shall have the right to submit interim statements of cost's
incurred in excess of the Allowance, which shall be paid by Tenant to
Landlord within thirty (30) days after being billed therefor. Tenant
agrees that in the event of default of payment thereof, Landlord shall
(in addition to all other remedies) have the same rights as in the
event of default of payment of Rent under the Lease.
2.2 TENANT'S WORK COMPLETION DATE
(a) Notwithstanding any provisions to the contrary contained
in the Lease, the Term and Tenant's obligation to pay Rent set forth in
Section 3 of the Lease with respect to the Leased Premises shall
commence on the date that is 30 days after the date of the "Tenant's
Work Completion Date", that is, the date when all of the following have
occurred: (i) Landlord's architect's certificate of Substantial
Completion with respect to the Leasehold Improvements shall have been
delivered to Landlord and Tenant; (ii) substantial completion of
Tenant's Work as certified by an architect mutually acceptable to
Landlord and Tenant (any cost associated with such architect's
certification to be Tenant's responsibility); (iii) Landlord shall have
obtained a certificate of occupancy for the Building and the Leased
Premises from the governmental authority which has authority to issue
such certificates in the jurisdiction wherein the Leased Premises are
located; and (iv) Landlord and Tenant shall have accepted the Leasehold
Improvements as being in substantial conformity with the final,
approved plans and specifications submitted by Tenant, as said plans
and specifications may have been modified by change orders or otherwise
with Tenant's and Landlord's approval.
(b) A failure by Landlord to deliver the Leased Premises to
Tenant on or before the Target Commencement Date shall not terminate
the Lease, or be deemed a breach thereof by Landlord, but the Lease
shall continue in full force and effect. In such event, however, the
Rent provided for in Section 3 of
34
the Lease shall not begin to accrue with respect to the Leased Premises
until the "Commencement Date" (as defined in the Lease) shall occur.
Furthermore, Landlord shall reimburse Tenant for any costs incurred by
Tenant as a result of Tenant's having to "holdover" under Tenant's
existing lease for office space on West End Avenue.
(c) Notwithstanding the foregoing, in the event the Building
(excluding tenant finish work for other tenants) and Leasehold
Improvements are not substantially complete by June 1, 2003 (as such
date may be extended by delays in completing the Leasehold Improvements
caused solely by Tenant's delays), Tenant shall have the option to
terminate this Lease by giving Landlord written notice thereof. Upon
such termination, neither party shall have any further obligation to
the other under this Lease or otherwise.
2.3. If there are any changes in Tenant's Work by or on behalf of
Tenant, from the work as reflected in the final working drawings, each such
change must receive the prior written approval of Landlord and must be paid for
by Tenant to the extent that the cost thereof exceeds the Allowance, and, in the
event of any such approved change in the working drawings, Tenant shall, upon
completion of Tenant's Work, furnish Landlord with an accurate "as-built" plan
of Tenant's Work as constructed, which plans shall be incorporated into this
Work Letter Agreement by this reference for all intents and purposes.
2.4. Under no circumstances whatsoever will Tenant or Tenant's
authorized representative ever alter or modify or in any manner disturb any
system or installation of the Building, including, but not limited to, Central
plumbing system, Central electrical system, Central heating, ventilating and air
conditioning systems, Central fire protection and fire alert systems, Central
building maintenance systems, Central structural systems, elevators, and
anything located within the Central core of the Building. Only with Landlord's
express written permission and under direct supervision of Landlord or
Landlord's Contractor shall Tenant or Tenant's authorized representative alter,
add to or modify, or in any manner disturb any Branch of any system or
installation of the Building which is located within the Leased Premises,
including, but not limited to, Branch plumbing system, Branch electrical system,
Branch heating, ventilating and air conditioning system, and Branch fire
protection and alert system (for the purposes of this Section 2.03 "Central"
shall be defined as that portion of any Building system or component which is
within the core and/or common to and/or serves or exists for the benefit of
other tenants in the Building, and shall include, but not be limited to, main
fire loops on each floor of the Building and duct work to the VAV box; and
"Branch" shall be defined as that portion of any Building system or component
which serves to connect or extend Central systems into the Leased Premises).
2.5. All design, construction and installation shall conform to the
requirements of applicable building, plumbing, electrical and fire codes and the
requirements of any authority having jurisdiction over or with respect to such
work, as such codes and requirements may from time to time be amended,
supplemented, changed or interpreted. Furthermore, all such design, construction
and installation of Leasehold Improvements must always receive written approval
of Landlord or Landlord's Contractor, as the case may be, prior to commencement.
2.6. Tenant agrees to use, as a part of Tenant's Work, Building
Standard corridor doors and hardware unless other corridor doors and hardware
are requested by Tenant and approved by Landlord.
2.7. Tenant shall bear all costs of completing Tenant's Work,
including, without limitation, costs of working drawings and specifications, and
all costs of construction to improve the Leased Premises to a condition greater
than provided for by the Allowance. Notwithstanding any provision contained
herein to the contrary, it is understood and agreed that Landlord shall have no
obligation to commence installation of any work in the Leased Premises until
Tenant shall have furnished to Landlord and Landlord shall have approved the
final working drawings as required by the provisions hereof. Notwithstanding the
review and approval by Landlord of Tenant's plans and specifications, Landlord
shall have no responsibility or liability in regard to the safety, sufficiency,
adequacy or legality thereof and Tenant shall be solely responsible for the
compliance of such plans and specifications with all applicable laws and
regulations, the architectural completeness and sufficiency thereof and other
matters relating thereto.
35
3. LANDLORD'S WORK.
3.1. As Landlord's contribution to the Leasehold Improvements, Landlord
will provide in or to the Leased Premises the Building Standard items required
to complete the Leased Premises to Shell Condition and the Allowance to be used
by Tenant to pay for all or a portion of the cost of completion of the Leasehold
Improvements.
3.2. The costs of modifications and changes from Building Standard for
any item will include the cost of architectural and engineering design and the
increased costs of construction, and such costs will be paid by Tenant.
3.3. Landlord shall be responsible for all construction and
installation conforming to the requirements of applicable building, plumbing and
electrical codes and the requirements of any authority having jurisdiction over,
or with respect to, such work in the event Landlord's Contractor performs the
Tenant Work.
4. PUNCH LIST WORK. Notwithstanding any provision to the contrary
contained in this Lease, within thirty (30) days following Tenant's Work
Completion Date, Tenant shall submit to Landlord a written itemization (the
"Punch List") of items of construction that were not properly completed. Upon
receipt of the Punch List, Landlord shall expeditiously (but not later than
thirty (30) days thereafter) cause such items to be corrected or completed. If
the nature of such Punch List item is such that it cannot reasonably be
completed within such thirty (30) day period, Landlord shall commence to repair
or complete such item within the thirty (30) day period and shall diligently
prosecute such Punch List work to completion.
5. DEFECTIVE WORK. Landlord warrants to Tenant that (i) the Leasehold
Improvements will be constructed in accordance with the plans and specifications
submitted by Tenant, (ii) all materials and equipment furnished will be new,
unless otherwise specified, (iii) the Building and the Leasehold Improvements
will be of good quality, free from faults and defects in all material respects,
and (iv) the Building and the Leasehold Improvements shall comply in all
material respects with all applicable laws, codes and regulations, including by
way of example, but not as a limitation, environmental, zoning, building and
land use laws, codes and regulations. Without limiting the generality of the
foregoing, if within one (1) year after the date of substantial completion of
the Building and the Leasehold Improvements, the Leasehold Improvements or any
part thereof is found to be defective or not in accordance with Tenant's plans
and specification, Landlord shall correct the same within a thirty (30) day
period, unless Tenant has previously given Landlord, a written acceptance of
such condition. Unless such condition is specifically referred to and accepted
in a written instrument delivered to Landlord, Tenant's acceptance of the
Leasehold Improvements pursuant to the Lease shall not be deemed to be written
acceptance of any such condition.
If the foregoing correctly sets forth our understanding, kindly
acknowledge your approval in the space provided below for that purpose.
LANDLORD:
▇▇▇▇▇▇ Hills IV Partners
By:
--------------------------------------
Managing General Partner
36
AGREED TO AND ACCEPTED THIS 20th day of June, 2001.
TENANT:
SYMBION, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
Title: CEO
--------------------------------------
37
EXHIBIT G
SPECIAL STIPULATIONS
1. Right of First Refusal.
A. If any space adjoining the Leased Premises (being on the same floor as
the Leased Premises) becomes vacant and available for lease during the Term of
this Lease, Landlord shall notify Tenant of its availability in writing and
Tenant shall have fifteen (15) days from the date of Landlord's notice to Tenant
to advise Landlord in writing that Tenant accepts such space offered in its
present condition or built out in accordance with a mutually approved plan, and
agrees that it shall become a part of the Leased Premises. Failure by Tenant to
notify Landlord within the time specified shall constitute Tenant's waiver of
its right to add such space to its Leased Premises.
B. The Minimum Annual Rental for the space offered shall be equal to the
market rate applicable at the time, but in no case shall the Minimum Annual
Rental be less than the rate then payable for the Leased Premises according to
the terms of this Lease, including any rent escalations. The approximate date
possession is to be delivered shall be set forth in Landlord's notice to Tenant.
Tenant's obligation to commence payment of Minimum Annual Rental shall occur on
the earlier of the date possession is delivered to Tenant by Landlord as
evidenced by a certificate of occupancy or when Tenant occupies all or a portion
of such space for the conduct of its business and continues until the expiration
or sooner termination of this Lease.
C. Any additional rental obligation of Tenant contained in this Lease
based upon the relationship of the Leased Premises to the total rentable area of
the Building shall be adjusted to reflect the increase in the area of the Leased
Premises. Prior to delivery of possession, Tenant shall execute an amendment to
this Lease reflecting the addition to the Leased Premises, the additional
Minimum Annual Rental, the change in ratio of the Leased Premises to the total
rentable area of the Building and any other revisions necessary because of such
additional space being added to the Leased Premises. All other terms and
conditions of this Lease shall apply to the area of the Leased Premises added
pursuant hereto; provided, however, the Allowance for such additional space
shall be reduced prorata, based on the number of years in the original Term of
the Lease versus the number of years remaining in the Term at the time of
Tenant's exercise of its right of first refusal.
38
EXHIBIT H
JANITORIAL SCHEDULE -- TENANT SPACE (LEASED PREMISES)
SERVICE SPECIFICATIONS
PART I -- DAILY SERVICES -- TENANT SPACE
Section A -- Floors
1. Hard surface floors: swept and/or dust mopped with dust
control treated mops or other effective tools and left
free of dust; spillages removed as needed
2. Carpet: vacuumed
Section B -- Restrooms -- Tenant Space and/or Full Floor
Tenant
1. Floors: detergent mopped and rinsed
2. Fixtures: cleaned and sanitized
3. Mirrors: cleaned
4. Bright metal: polished
5. Supply pipes: cleaned
6. Waste receptacle: emptied, cleaned and plastic liner
replaced as needed
7. Towel, tissue and hand soap receptacle: refilled from
Tenant's stock
Section C -- Receptacles
1. Waste receptacle: emptied and resulting debris placed in
designated areas. Plastic liners replaced as necessary
from Tenant's stock.
Section D -- Dusting -- Tenant Space
1. Filing cabinets, bookcases, chairs, tables and other
office furniture: dusted with dust control treated
cloths or other effective tools and left clean and free
of dust. No correspondence or notes shall be moved.
2. Window ▇▇▇▇▇, ledges, moldings, picture frames and other
low dusting: dusted with dust control treated cloths or
other effective tools. Office machines will be dusted
upon request.
Section E -- Glass -- Tenant Space where applicable
1. Entrance door glass: cleaned
Section F -- Miscellaneous
1. Drinking fountains: cleaned and sanitized
2. Kitchen sinks: cleaned and polished
PART II -- OTHER FREQUENCIES -- TENANT SPACE
Section A -- Monthly Service
1. Window blinds and window ▇▇▇▇▇: dusted
2. Elevator tracks: thoroughly cleaned and polished
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Section B -- Quarterly Service
1. All hard surfaced flooring: machine polished
2. Wash ceramic tile walls in restrooms
3. Machine scrub restroom floors with disinfectant
40
I - 1
FRONT ELEVATION
[INSERT FRONT ELEVATION GRAPHIC]
41
EXHIBIT I
Building Systems and Technology
1. Exterior appearance as referenced in attached renderings featuring
granite accents and precast concrete panels with reflective glass
windows.
2. Two-story atrium lobby appointed with marble, granite, and high quality
hardwood accents:
3. Central restroom facilities on each floor with ceramic tile individual
built in stalls with stained wood doors.
4. Three passenger elevators servicing all tenant floors with separate
service core including dedicated loading dock and freight elevator.
5. Interior partitioning consisting of nine- (9'0") foot floor to ceiling
5/8" gypsum board and steel stud frame.
6. Demising partitioning if twelve foot six inches (12'6") from concrete
floor to underside of slab above with steel stud frame.
7. Entry doors to be solid stain grade hardwood veneer, 9'0" x 3'0" x 1
3/4" in painted hollow metal frames with mortise lever handle hardware.
8. Interior doors to be solid stain grade hardwood veneer, 8'6" x 3'0" x 1
3/4" in painted hollow metal frames with cylindrical latch set.
9. Ceiling system shall be suspended white 2'0" x 2'0" acoustical laid
into 2'0" x 2'0" white steel grid.
10. Building Standard carpeting shall be 30oz., 100% Spectron nylon
anti-static, tufted cute pile, jute backed, glued down.
11. Interior window treatment shall include thin-type horizontal blinds,
one per window.
12. Lighting systems include three-lamp deep-dish parabolic lighting
fixtures with energy saving ballast, lay-in 2'0" x 4'0" type.
13. Computerized energy management systems for optimal energy efficiency.
14. Heating, Ventilating and Air Conditioning system shall be variable air
volume consisting of 10 interior zones and 15 exterior zones per floor
each individually thermostatically controlled.
15. Sprinklers shall be semi-recessed heads in standard ceiling tile.
16. 5th floor tenant space shall have single door access to the balcony
overlooking center court. Balcony area will include concrete pavers and
finishes consistent with the renderings contained in this exhibit.
Single door access shall be located to either the right or left of
center.
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I - 2
SITE PLAN
[INSERT SITE PLAN GRAPHIC]
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I - 3
FOURTH FLOOR PLAN (TYPICAL)
[INSERT FOURTH FLOOR PLAN GRAPHIC]
44
I - 4
FIFTH FLOOR PLAN (TYPICAL)
[INSERT FIFTH FLOOR PLAN GRAPHIC]
45